When you and your spouse own substantial assets, dividing property can involve more than deciding who keeps the house or bank accounts. If you cannot reach an agreement, Maryland uses equitable distribution to resolve marital property disputes, but that does not mean a judge simply splits or retitles every asset. After identifying and valuing marital property, the court may grant a monetary award or transfer certain types of property after considering factors set by state law.
If you and your spouse are working toward a marital settlement agreement, these six property issues may require closer attention:
1. Business interests and professional practices
A family business, medical practice or other ownership interest may need an expert to determine what it is worth. The agreement may also need to address whether one spouse will keep the business or their share of it, buy out the other spouse or sell it.
2. Retirement accounts and pensions
Retirement assets may have different transfer requirements. Dividing some employer-sponsored retirement plans may require a qualified domestic relations order (QDRO), while IRAs and other accounts generally follow different procedures.
3. Stock options and other executive pay
Stock options, company stock awards and pay you will receive later can complicate a settlement. Their value may depend on when you gain the right to receive or use them. Your agreement may need to account for when these benefits become available and how they will be handled.
4. Real estate
A primary residence, vacation home or rental property may require an appraisal before you determine its value. If you and your spouse agree on how to handle the property, your settlement can state whether you will sell it, transfer ownership or have one spouse buy the other’s share.
5. Tax consequences
Assets with similar current values may produce different tax results. Selling property or withdrawing retirement funds later can affect how much value you ultimately receive from certain property.
6. Debts and other financial obligations
Mortgages, business loans and tax obligations can reduce what an asset is actually worth to you after the debt is considered. Reviewing debts alongside property can provide a clearer picture of what each part of the settlement is worth.
Look beyond the listed value
A property settlement can affect your finances long after your divorce ends. An asset’s current value may not show its related debt, future taxes or the steps required to divide or transfer it. An attorney can help you review proposed settlement terms, explain how Maryland property rules apply and identify when financial or valuation professionals may be useful.
