Division of Property

Maryland Court Interprets Settlement Agreement Dividing Marital Property

February 12, 2015 | by Anthony A. Fatemi, LLC

In many divorce cases, a couple is able to reach an agreement concerning some of the key contentious issues, such as the division of marital property, alimony, child support, and the like. Of course, the parties are encouraged to find some middle ground on these fundamental matters, since it tends to save time, money, and unnecessary heartache. But even in cases where the parties initially agreed to a settlement that is incorporated in the divorce judgment, there is no guarantee that circumstances won’t arise in the future that will prompt one spouse to seek the court’s involvement. No matter how agreeable a family law case seems, the spouses are strongly encouraged to seek their own counsel, especially when children are involved. An experienced Maryland family law attorney can help protect your financial and logistical rights in a dissolution of marriage case at every step of the way.

In a recent Maryland case stemming from a divorce judgment granted in 2010, Baker v. Baker (Md. Ct. of Special App. 2015), the ex-husband sought to restrict his ex-wife’s entitlement to a “capital-loss carry-forward” resulting from activity in the couple’s jointly held investment accounts. During the original dissolution proceedings, the parties entered into a Voluntary Separation and Property Settlement Agreement (the “Agreement”), which was incorporated into the judgment of divorce. Among other items, the Agreement addressed matters of alimony, child custody and support, and the division of marital property. At issue in this case was one particular clause in the Agreement that allocated the couple’s investment accounts.

Maryland Law Governs Significant Aspects of Divorce

January 30, 2015 | by Anthony A. Fatemi, LLC

Each state in the country has the authority to enact laws governing marriage and divorce. These laws can vary a great deal, especially when it comes to the acceptable grounds for divorce. The Maryland Family Code identifies two types of divorce that couples may pursue: absolute and limited. When seeking an absolute divorce, the couple must establish legal grounds for separation. State law provides the following acceptable scenarios: a 12-month separation period, desertion, adultery, cruelty, excessively vicious conduct, certain criminal convictions, and insanity.

According to the Maryland Courts’ website, the most commonly used ground for divorce is the 12-month separation. In order to satisfy the legal requirement, parties must live separately for 12 uninterrupted months. (In a recent blog post, we discussed a controversial Maryland case where there was some question as to whether the couple seeking a divorce maintained 12 uninterrupted months of separation.) In a limited divorce action, while courts have the authority to resolve significant family issues, this proceeding alone does not end the marriage. Generally, parties who file for a limited divorce do so in order to resolve certain issues, financial and otherwise, that cannot wait until the court grants an absolute divorce. Furthermore, a limited divorce may suit couples who do not qualify for an absolute divorce. Continue reading

Maryland Court Denied Husband’s Attempt to Set Aside Marital Settlement Agreements

September 15, 2014 | by Anthony A. Fatemi, LLC

In any divorce matter, it is important for each spouse to consult with his or her own attorney, who will seek to protect that person’s separate rights going forward. One of the most important documents that divorcing spouses often agree to is a marital settlement agreement or “MSA.” In many cases, the MSA will purport to resolve any number of issues, such as property division, alimony, child support, custody, and other matters. That agreement can be made part of the ultimate divorce judgment, depending on the circumstances and the parties’ wishes. At each step in the proceedings, there are many decisions to be made that could affect the outcome of a case. For this reason, parties are encouraged to secure their own family law attorney, who is experienced handling such cases in the state of Maryland.

In a recent case, the husband and wife had hired an attorney to handle an immigration matter. Some time later, the couple decided to divorce. They discussed separation and agreed to a variety of terms to be incorporated in a marital settlement agreement. In 2005, the wife asked that same attorney to handle memorializing the terms related to the division of marital property. The attorney drafted the document, the husband provided some revisions, and the parties signed the agreement on October 18, 2005. The document contained a clause titled “Independent Counsel,” wherein the husband acknowledged that he signed the agreement without his own attorney, freely and voluntarily.

Despite signing the agreement, the couple did not separate at that time. In 2007, the wife discovered that the husband was having a second extramarital affair, and they decided to prepare another settlement agreement to address issues not covered by the 2005 agreement. Based on their discussions, the wife asked the same attorney to draft another document. The husband was involved in reviewing the document and making certain changes. In 2008, the parties executed the final MSA, which also included an independent counsel provision. In 2009, the husband filed for divorce and simultaneously tried to allege that the 2005 and 2008 agreements were void and unenforceable and should be set aside. He claimed that they were entered into when the parties were still in a confidential relationship with the attorney who handled the previous immigration matter. Continue reading

Maryland Court Addresses Allocation of Retirement Benefits in Divorce

July 30, 2014 | by Anthony A. Fatemi, LLC

One of the most significant financial aspects of a divorce is the division of marital property. Under Maryland law, courts have the authority to identify marital property, assess its value, transfer ownership between the parties, and issue a monetary award in order to even out the rights of the parties. Depending on the case and the nature of the relationship between the spouses, the couple may be able to enter into an agreement specifying the allocation of property, instead of relying on the court to do so. In any case, because this part of the divorce proceeding can significantly affect the parties’ lifestyle going forward, it is important to consult with an experienced Maryland attorney as early in the process as possible.

One of the items subject to property division in divorce is a spouse’s interest in retirement plan benefits earned during the marriage. In a recent divorce case, the couple entered into a property settlement agreement that included a clause allocating future benefits from the retirement plan sponsored by the husband’s employer. The agreement incorrectly implied that the plan was governed by federal law (ERISA), even though it was exempt from that law, and further stated that the divorce judgment would serve as a QDRO (a Qualified Domestic Relations Order). Neither party took any steps to obtain a QDRO for submission to the pension plan.

The husband remarried and designated his new wife as the beneficiary under the retirement plan. Upon the husband’s death, a dispute arose between the former wife and the second wife as to the entitlement of the retirement benefits. In accordance with the property settlement agreement, the former wife applied to the pension plan for a portion of the benefits that accrued during the marriage. The pension plan rejected her request, arguing that it never received a QDRO indicating that the ex-wife was a beneficiary of the husband’s death benefits. Next, she filed a complaint against the current wife, alleging that she had been unjustly enriched by receiving all of the pension and death benefits. Furthermore, she requested the imposition of a constructive trust on the portion of the pension and death benefits that the second wife received. Continue reading