Maryland Divorce Lawyer Blog

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.

Including ‘Lifestyle’ Clauses in a Maryland Prenuptial (or Postnuptial) Agreement

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

Money is often a powerful motivator. That’s true whether you’re a parent working out a child’s allowance or a spouse-to-be working out the terms of your prenuptial (or postnuptial) agreement. In addition to arriving at terms with which both you and your soon-to-be spouse can live, making a prenuptial agreement as successful as possible also involves limiting the contract to subject matters that are enforceable in courts of law. Whether you’re deciding what subjects to include or negotiating the numbers, an experienced Maryland divorce lawyer can provide crucial assistance in drafting and executing your prenuptial agreement.

Recently, Yahoo! Finance AU reported on the “most ‘shocking’ clause” an Australian divorce lawyer – who had practiced law there for more than 20 years — had ever encountered in a prenuptial agreement. In a podcast interview, the attorney recalled a wealthy client who desired a provision that required his wife-to-be to avoid gaining weight or else suffer a financial penalty. Specifically, the prenuptial agreement said that “for every 10 pounds the wife gained in the marriage, she would lose US$10,000 (AU$15,000) a month in alimony,” according to Yahoo!

Judging by this interview, Australia apparently grants parties to a contract very strong freedom to construct those agreements as they wish. As the attorney explained, “The court said, ‘This is a disgusting provision. I don’t know why you married this person.’ But it’s enforceable. It’s a contract… they may be ridiculous rules but you agreed to them. And you have a right to do that.”

What the Law in Maryland Does (and Doesn’t) Require of Pregnant Women Who Seek Divorces in this State

May 17, 2024 | by Anthony A. Fatemi, LLC

A Missouri lawmaker made headlines in February for proposing a noteworthy change to the divorce laws of that state. The Kansas City Democrat’s bill would alter a five-decade-old law to ease the hurdles facing women who are pregnant and seeking a divorce there. Maryland does not have a similar law on the books restricting a pregnant woman who seeks a divorce, but getting a Maryland divorce while pregnant does present a unique set of issues and challenges. Whatever your situation – but especially if you’re facing unique complexities like needing a divorce while pregnant – an experienced Maryland divorce lawyer can help you navigate the process and get a positive outcome… and get it as efficiently as possible.

As a specific matter, the existing Missouri statute (contrary to some social media claims) does not create a blanket ban on issuing judgments of dissolution to women who are pregnant. Pregnancy is one of eight disclosures a spouse filing for divorce must make in her petition. (Other examples of required disclosures include residency, the date and location of the marriage, and the date of separation.) Once the petitioning spouse discloses her pregnancy, the judge has the discretion to forego issuing a final judgment until that pregnancy has reached its end.

These laws, while discretionary on their faces, sometimes function as de facto bans. For example, Kentucky’s statute shares many similarities with Missouri’s regarding mandatory disclosures. It requires disclosing the date and the place of the marriage, the date of separation, the names and ages of the minor children, and whether the wife is pregnant. A subsequent subsection notes that if the wife is pregnant, “the court may continue the case until the pregnancy” ends.

Maryland Judgments of Absolute Divorce Based on Separations of 12 Months or More

April 30, 2024 | by Anthony A. Fatemi, LLC

When decide it’s time for a divorce, you hope that the process will be as amicable as possible. At a minimum, you hope that your spouse will acknowledge that your marriage is, indeed, over, even if they choose to contest issues in the divorce vigorously. Sometimes, though, your spouse may attempt to derail the process by contending that you’re not entitled to a judgment of divorce at all. Whatever kind of pushback you receive from your spouse, an experienced Maryland divorce lawyer can help you navigate and complete the process as efficiently and painlessly as possible.

A recent Baltimore County divorce case provides a practical example of what you do (and don’t) have to demonstrate to the court to be eligible for a judgment of absolute divorce based on separation.

The wife filed for divorce in June 2022, listing a one-year separation as her basis for the divorce. According to the wife, the couple separated nine years earlier but the husband periodically stayed “over [at the wife’s house] on Christmas Eve and New Year’s Eve.” Allegedly, the last of these overnights occurred on New Year’s Eve 2020.

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.

Paying for Relatives’ Emergency Expenses and the Risk of a Dissipation-of-Assets Claim in Your Maryland Divorce Case

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

An old saying posits that “When it rains, it pours.” Sometimes in life, that can mean having to deal with multiple traumatic events — like your divorce and a relative’s grave illness — at the same time. Whatever the secondary emergency may be, you should take care when it comes to spending money during the pendency of your divorce case, even if it is for something as important as paying for care for a close loved one. What you can and cannot do will depend on multiple factors, like what court orders you’re under and whether the funds you seek to spend are marital or non-marital. One way to enhance your odds of avoiding troubles down the road regarding those expenses is to consult an experienced Maryland divorce lawyer before you act.

A recent divorce dispute from Anne Arundel County is a stark reminder of this notion. The husband filed for divorce in late 2019. In early January 2020, the trial judge issued an “Injunction to Prevent Dissipation of Assets.” That injunction barred the husband from “disposing of… any of the property alleged to be marital property or property acquired during the separation.”

In late 2021, the husband emptied the entire $72,800 balance of his Thrift Savings Plan and put the net proceeds (after penalties and taxes) of $56,800 into his credit union account. The husband eventually spent all of those proceeds to support his father in Nigeria, who had stage IV cancer. The couple also had a Lexus vehicle that the husband sold during the divorce for $18,600, of which the wife received $0.