Equitable Distribution

Dealing With Cryptocurrency and Other Digital Assets in a Maryland Divorce

October 31, 2024 | by Anthony A. Fatemi, LLC

Earlier this month, news sources reported that cryptocurrency is now an asset subject to distribution in divorce… in South Korea. While your divorce likely won’t be adjudicated using the laws of South Korea, this new development half a world away is still a significant reminder that digital assets like crypto are an ever-increasing portion of married couples’ asset portfolios and, in Maryland, they are (and have been for several years) subject to equitable distribution in a divorce in this state. If you have questions about your digital assets and equitable distribution, be sure to seek out answers you can rely on by talking to an experienced Maryland divorce lawyer.

In Maryland, we have the Marital Property Act. That statute says that all marital property is subject to equitable distribution. That includes digital assets like Bitcoin, Ethereum, Tether, and other forms of crypto, but these assets present some unique challenges in a divorce. Two of the biggest are: finding it and valuing it.

Let’s tackle the latter first. Valuing crypto is inherently complicated because crypto’s value is much more volatile than other assets. Take Bitcoin, for example, which went from 62,800 to below 32,000 to 52,700 to 42,100 to 67,000… in a span of just seven months in 2021. This rapid and radical shifting can make pinpointing an accurate value of your (or your spouse’s) crypto assets particularly problematic.

Marital-Versus-Non-Marital Asset Division Decisions in Maryland… and How the ‘Source of Funds’ Theory Applies to Them

June 10, 2024 | by Anthony A. Fatemi, LLC

In Maryland, one of the most essential components of a divorce is the division of assets and the biggest asset most divorcing couples possess is their home. As a result, deciding whether the marital home is a marital asset, one spouse’s separate property, or a combination of the two can make a big difference in the final outcome the court reaches. When seeking a fair and just financial outcome in your divorce case, ensuring that the court has a clear and complete picture of your home – and how it is/was paid for – is vital. If you have questions about equitable distribution in a divorce, an experienced Maryland divorce lawyer can help you with knowledgeable answers about how the courts in this state make these determinations.

In 1978, the Maryland General Assembly passed the Marital Property Act. In 1982, the Maryland Supreme Court “traced the history of the act in-depth and divined the legislative intent.” In its ruling, the high court determined that, under the Marital Property Act, the correct method for determining whether an asset was marital or non-marital was to follow the “source of funds” theory, rather than using Maryland’s old “title system.”

Under the source of funds theory, marital-versus-non-marital decisions depend on “the source of the contributions as payments are made, rather than the time at which legal or equitable title to or possession of the property is obtained.” A recent divorce case from Prince George’s County is a good example of how the courts apply this theory.

When Personal-Professional Relationship Breakdowns Lead to Unreasonable Lengthy Litigation: Awards of Attorneys’ Fees in Maryland

April 16, 2024 | by Anthony A. Fatemi, LLC

When you bring in someone as a co-owner of your business, you want someone you can trust implicitly. For many people, the most trusted people in their lives are their spouses. However, when the personal relationship goes awry, so may the business relationship. When both break down, legal action is often necessary.

P.R. and M.D. were a same-sex couple who “considered themselves married, but… were never legally married.” The women also were business partners for more than a decade and a half, sharing a home in Brandywine and a second property in Accokeek which housed their business, a daycare facility.

They separated in 2017. M.D. sued, asking the court to order a sale of the two properties and the daycare business. P.R. countersued, alleging that M.D. had engaged in “embezzlement, deceit, fraudulent conversion, and breach of fiduciary duty.” The foundation of this claim was M.D.’s allegedly moving daycare funds from business accounts to personal accounts.

Obtaining Income Information Through Pretrial Discovery as Part of Your Maryland Divorce

March 28, 2024 | by Anthony A. Fatemi, LLC

Performing complete pretrial discovery is often an essential part of divorce litigation. Your spouse’s income and earnings are likely a crucial piece of that puzzle. This discovery may be as basic as obtaining a few items documenting wages (like W-2 forms) or a complicated matter involving documentation of multiple streams of present and deferred income. An experienced Maryland divorce lawyer can be vital to getting all the information necessary to provide the court with a full and complete picture of your spouse’s wealth and assets.

The discovery dispute in the divorce of C.B. and R.B. represents a clear illustration of how counsel can help when you’re initially thwarted in your efforts to obtain essential income information.

The couple were two high-powered professionals who married in 2011 and separated in 2023. The couple had prenuptial and postnuptial agreements that resolved most – but not all — of their property issues. Specifically, the spouses disputed issues of a monetary award and division of some personal property and retirement accounts.

Real Property, Divorce, and the Law of Equitable Distribution in Maryland

March 15, 2024 | by Anthony A. Fatemi, LLC

The joke about lawyers and math not mixing is an old one, going back at least as far as a 1976 Saturday Night Live skit regarding President Gerald Ford and a debate question about the federal budget. In the real world, many areas of the law are quite math-intensive, not the least of which is equitable distribution in a divorce. Just like all areas of math, equitable distribution math requires not just understanding how to perform calculations, but also choosing the correct formula. In-depth knowledge of these elements can be crucial to getting a genuinely fair outcome from your divorce, which is why advice and counsel from an experienced Maryland divorce lawyer is essential to success.

A recent divorce case originating in Carroll County is a good example of this. The spouses, W.M. and T.M., married in 2014. Sometime before that, they jointly purchased a lot in Westminster where they eventually built their marital home. During the marriage, the couple purchased a vacation home in Ocean City.

4½ years into the marriage, the husband filed for divorce. At the trial’s conclusion, in addition to resolving child custody and child support issues, the court ordered the sale of both homes, with the husband receiving the proceeds of the marital residence’s sale. (The order split the proceeds of the vacation home’s sale between the spouses.)

What Happens to an Inherited Property Used as Collateral on a Loan Taken Out During a Couple’s Marriage?

February 26, 2024 | by Anthony A. Fatemi, LLC

“Yours, Mine and Ours” is a 1968 film about a very large blended family. “Yours, mine, and ours” could also refer to the analysis that must be done for equitable distribution in a divorce. Arriving at a truly equitable distribution requires accurately determining which assets are “yours,” which are “mine,” which are “ours,” and which are a combination of the above. This can be a complex and intricate process and is one where an experienced Maryland divorce lawyer can render invaluable aid toward protecting your interests.

One type of asset that can often be the center of a marital-versus-non-marital classification dispute is real property. That was the case with one Anne Arundel County couple and a million-dollar Annapolis residence that the husband inherited.

During the marriage, the couple jointly purchased investment properties in Bowie. To secure the funding needed for the purchase, the husband put up as collateral the inherited property. The couple eventually sold the Bowie properties and repaid the loans in full. To repay those loans, the couple used both proceeds from selling one of the Bowie properties and marital funds.

Fraud in Your Maryland Divorce Case and the Importance of Having Skilled Legal Representation

February 15, 2024 | by Anthony A. Fatemi, LLC

As family law attorneys, we see the good, the bad, and the ugly when it comes to divorce litigation. One unfortunate scenario that occurs regrettably often is a spouse who receives divorce papers from his/her spouse but decides to proceed with the divorce without legal counsel. This choice can have seriously damaging consequences, both financially and otherwise. Don’t make that mistake; instead, retain an experienced Maryland divorce lawyer to be the effective advocate you need.

A divorce case from Annapolis is a strong cautionary tale in this regard. The husband’s complaint alleged that both spouses mutually agreed not to seek alimony and that the spouses had “no marital property or debts that need to be decided by the court.”

At a virtual hearing in 2021, the magistrate judge asked if the spouses had resolved all their issues and distributed all their property. The spouses — neither of whom had attorneys — said yes. The magistrate explained that the spouses’ answers constituted a waiver, meaning “you cannot come back to the [c]ourt at a later date and ask the [c]ourt to grant your relief.” The magistrate asked if the spouses understood, and again both spouses said yes.

Equity and Judicial Discretion in Maryland Divorce Cases

December 15, 2023 | by Anthony A. Fatemi, LLC

A lot of people, when they hear the phrase “equitable” in connection with a divorce case, immediately think “50-50.” That’s not necessarily true. The law actually gives trial courts broad discretion in deciding what is (or is not) equitable, whether that means distributing assets and/or debt obligations evenly or ordering something different. Given the judge’s substantial discretionary power, it is vital to have a knowledgeable Maryland divorce lawyer on your side, you that you can be confident that the judge has all the information necessary to accurately decide was is a just outcome.

As noted above, a division is not always 50-50. As an example, there’s this divorce-related case from Brookeville.

The spouses worked out a marital settlement agreement in early 2015 that said that the wife would receive the exclusive “use and possession” of the marital home for three years. After that 36-month period elapsed (or if the wife remarried earlier,) the agreement dictated that the home would be listed for sale.

‘…And the Dog, Too’: Dealing with Pets as Part of a Maryland Divorce

August 31, 2023 | by Anthony A. Fatemi, LLC

Americans’ attitudes toward pets have changed over the last several decades. Today, many pet owners call themselves “pet parents” and their pets “fur babies.” While these relationships have evolved, animal law has been slow to follow suit. This can present some unique challenges when a married couple who shares a pet (or pets) decides to divorce. As is true of many circumstances surrounding divorce, you have options for dealing with this challenge. To make sure you are protecting your interests — and the best interests of your pet — it is wise to consult with an experienced Maryland divorce lawyer about your situation.

One location where the law is evolving is neighboring D.C. In April of this year, the “Animal Care and Control Omnibus Amendment Act of 2022” took effect. That new law says that, when a couple goes through a divorce or a legal separation proceeding, the trial judge should consider the “best interests” of the “pet animals” when deciding which spouse gets the pets.

Here in Maryland, the law functions differently. Maryland law says that pets are personal property, essential the same as a car, a boat, or a sofa. The significance of that — in terms of a divorce — is that your pets (much like that hypothetical car, boat, or sofa) are subject to equitable distribution if you acquired them during your marriage. (If you brought them into your marriage, the law often will deem them your non-marital property and you will retain them after the divorce. The same is true for pets your spouse brought into the marriage.)

Determining Marital Versus Non-Marital Portions of a Home Purchased With a Marital Mortgage But a Non-Marital Down Payment

August 17, 2023 | by Anthony A. Fatemi, LLC

In elementary school math class, students begin learning about the “order of operations.” This concept governs the sequence in which to complete various mathematical operations in pursuit of the correct solution. In divorce law, we have something similar. Maryland divorce law lays out a specific sequence of mathematical steps to use in calculating the marital and non-marital interests in a property. These computations — and the correct performance of them — can have a major impact on the outcome of your divorce. To make sure you are getting a fair judgment, you need to ensure the court has all the relevant facts. An experienced Maryland divorce lawyer often can provide essential assistance in doing that.

Just like how solving a math equation without following the order-of-operations rules will result in a wrong answer, doing the mathematical steps for calculating marital interest in the wrong order similarly will yield an errant result… one that’s subject to reversal on appeal.

The recent divorce of one Calvert County couple is a good example. J.S. and H.S. married in the summer of 2014. Five months earlier, the husband had purchased a six-bedroom home for $450,000, paying $160,000 down.