Property rights in divorces much changed by 1978 law

Mailbag

July 14, 1996|By Michael Gisriel

Dear Mr. Gisriel: What are a spouse's legal rights in Maryland regarding jointly owned or individually owned real estate in the event of a marital breakup or divorce?

Kathy Morseberger

Rosedale

Dear Ms. Morseberger: Under Maryland law prior to 1978, at the termination of a marriage, legal title was the only controlling factor as to the disposition of real estate. For example, legal title in a home required that it be distributed to the record title holder when the divorce decree was finalized. Thus, even though a spouse may have contributed to the purchase, improvement or maintenance of the parties' marital home, if legal title was vested in the other spouse, the home would be distributed only to the titled owner upon the divorce of the parties.

However, Maryland law regarding property rights in the event of a divorce was drastically changed in 1978 when the Maryland Marital Property Act was enacted by the Maryland General Assembly and signed into law by the governor.

All property acquired after the formation of a marriage is now "marital property" with ownership interests existing in each spouse separate from a spouse's "legal title" interest in the property. The only exception is real property acquired previous to the marriage by a spouse individually, or acquired by gift or inheritance, or excluded from a couple's "marital property" by a pre-nuptial agreement.

Upon a divorce or legal termination of a marriage, unless the real and other tangible property is voluntarily divided by the parties by virtue of a Marital Property Settlement Agreement, a court is forced to dispose of or distribute title to "marital property" after making several determinations.

First, all property that is "marital property" must be identified and the initial threshold, "legal title," to said property must be established.

Second, the value of all the property interests of each spouse must be determined. The court will consider the spouses' respective contributions toward the acquisition of the property.

Third, the court will order marital property distributions after considering the factors as outlined in determinations No. 1 and No. 2 above.

Often, when a divorce is acrimonious and the spouses are unable or unwilling to divide the marital property by virtue of an executed property settlement agreement, the court will be forced to order that the marital property be sold by a trustee and the net proceeds distributed to the divorcing parties according to percentage ownership interests determined by the court after all the evidence concerning legal title and marital contributions is considered.

Unfortunately, the current status of Maryland law regarding a spouse's legal rights with respect to real estate in the event of divorce or a marital breakup is still difficult to understand or explain.

The legislative intent of the marital property act enacted in 1978 was essentially to track the distribution of marital property that // followed legal title unless the distribution of property, according to legal title, was not equitable, in which case the court would order an adjustment of legal title based upon consideration of certain equitable circumstances.

These concepts do not always work as intended, and it may be time for the Maryland legislature to revisit the issue.

Pub Date: 7/14/96

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