Custody, alimony and asset distribution are the three major issues surrounding divorce. How your assets, including real property, personal property, bank and investment accounts and retirement accounts are divided by a court can have a major impact on divorcing couples. Maryland is an “equitable distribution” state which allows leeway for a court to grant a larger share of the marital assets to one spouse over the other. Martial assets (property) is any asset acquired during the marriage, no matter how it is titled, which was not received by inheritance to one spouse, gift from a third party to one spouse or assets directly traceable to one spouses pre-marital property.
In order to protect your assets during a divorce you should keep and maintain accurate and complete records of you financial affairs. Know all of your and your spouse’s banks, investment accounts and income information. Jointly filed tax returns should have most information regarding salary, interest income from investments and savings and other pertinent financial information. Be sure you keep a copy or have access to a copy of tax returns for at least the past 5 years. Pay stubs are also chock full of information regarding retirement investments, income and other benefits. If you inherit money keep it in a separate account and do not add money earned from marital sources. Interest or investment income directly traceable to the inherited account will be deemed non marital. Keep the account separate and in your name only. Use of inherited funds to pay a mortgage, pay living expenses or making investments in both spouses’ names will be deemed a gift from one spouse to the other.
Additionally try to keep records of assets you may have had at the time of your marriage. Look for or keep bank statements, retirement statement or assets valuations from the period of time around you wedding date. Many bank or investment accounts will only be preserved by the institution for 10 years, which can make tracing the asset to pre-marital property very difficult under Maryland divorce law.
Lines of credit, home equity loans and credit cards should be frozen in the event of divorce to reduce the marital debt for which you may be liable. Pay down debt in your name first then marital debt. Use marital money/assets to pay debt, not pre-marital assets first to pay down debt.
Business with other partners should have buy-sell agreements to protect from costly fights about the value of the business and long term ownership.
Lastly be sure to obtain competent legal advise from an attorney who specializes in martial law. Call Nicholas T. Exarhakis at 410-224-7464 for a free telephone consultation.