In Divorce, What Happens to Assets, Debts Amassed While Married?
The division of property and debt accumulated during the marriage is among the top areas that require scrutiny in divorce proceedings. Who gets to keep what property? And who will be stuck with certain debts?
The rule to remember and understand is that any asset or debt acquired by either spouse during the marriage is considered marital property and is subject to division or responsibility via the equitable distribution principle. Meanwhile, any asset or debt acquired before the marriage is considered separate or non-marital property.
Real Estate and Retirement Accounts
As noted, property acquired by couples when married belongs to both of them. Examples of marital property may include:
Real estate, including the family home, vacation properties, commercial building and land investments
Motor and recreational vehicles, such as cars, motorcycles, SUVs, pickups, motor homes, boats, yachts, personal water carriers and electric bicycles
Retirement investments, like IRAs as well as 401(k), 403(b), 457 and pension plans
Financial investments, including mutual funds, stocks, bonds and money markets
A family-owned business, such as a start-up business or one that you acquired during the marriage
Collectibles, that may include fine art, antiques, sports memorabilia and even wine
However, not only do assets require a thorough review in divorce, the same holds true for debts accumulated during the marriage. They remain the responsibility of both spouses. These debts may include those related to mortgages, credit cards, health care and student loans.
Understanding Equitable Distribution
Maryland follows the principle of equitable distribution when it comes to dividing marital assets and debt. This doesn’t not mean everything is split 50/50, rather everything is split fair and equitably.
Couples can opt to decide on their own how to divide everything, however, for those who need a court to intervene various factors will be utilized to determine what is fair and equitable.