Category: Marital Property

We are just 2 days away from Halloween when kids all across America will venture out “trick or treating”. If the truth is to be told, I probably went “trick or treating” longer than most. I remember being well into my high school years donning a costume of some sort (“punk rocker” one year, as I recall) and knocking on neighbors’ doors scoring tons of great candy and treats. After my evening of trick or treating was over, my sister and I would dump out our bags and survey our spoils, swapping some goodies for others. For me, I was willing to trade almost anything for Reese’s Peanut Butter Cups! My goodness, it was like a little bit of Heaven dipped in chocolate and wrapped in a gold seal! When I think back on those years it fills me with such joy. But these happy childhood memories would be altogether different if the day after Halloween I awoke to discover that half my candy had been taken from me and given to my sister. Cue the scary music and the shiver-inducing SCREAM!!!

Well it is just this kind of tale of woe that has inspired this week’s question. What if a special treat that was meant just for you somehow overnight becomes a gift that you are forced to share with someone else? You’d be wondering how this horrible injustice happened.

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Question: If one spouse receives a cash gift from a family member during the marriage is that gift treated as non-marital property under the Maryland Family Law Code?

Answer: It depends. Generally speaking, a gift of cash that one spouse receives from a family member that is made solely to that spouse will be considered non-marital property. However, this non-marital property can be converted into marital property if the giver of the gift and the receiver of the gift are not careful. For example, if the giver of the gift does not make it absolutely clear that the gift is made solely to one spouse (e.g., by writing the check solely in that spouse’s name) there may be an argument as to whether the monies was not intended to be a gift to both spouses. Moreover, the receiver of the gift may muddy the analysis by depositing the funds in a joint bank account. Then a court may wonder whether a “second” gift was made from the spouse who received the gift from his or her family member to that person’s spouse. To make matters worse, if the account into which the money was placed is one in which both spouses deposit their paychecks and other funds that the couple receives, the “gift money” will have commingled with marital money – making it difficult to “trace” the gift (which is claimed to be non-marital) from the other marital funds in the account.

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I have seen first-hand how clients have inadvertently forfeited their right to hold on to non-marital assets by failing to keep monetary gifts or inheritances separate from marital funds. In several cases, down payments for home purchases were “gifted” by one party’s parents and then placed in joint bank accounts with other household funds until the closing date. In another case, a father of one client provided a loan to the parties to purchase a home. Upon the death of the client’s father several years later the father’s estate forgave the debt of the parties, thereby making a “gift” to both parties rather than a gift or inheritance to his son solely. As you might imagine, it was a bitter pill to swallow for the client whose father’s gift that purchased a lot of equity in the couple’s marital home was shared equally by the father’s soon to be former daughter-in-law.

This Week’s Takeaway: Mind your goodie bags lest you find that you’ve sprung a hole in the bottom and half your treats have been lost.

Many of us can relate to the inordinate amount of time shopping for the perfect engagement ring. There is so much pressure involved in choosing the ring as it seems to symbolize more than just the intention to marry your special someone.

Whether we like it or not, in many cases the engagement ring is seen as a measure of success and wealth on the part of the ring-giver. Sometimes, the engagement ring is viewed as a reflection of how highly the ring-giver esteems and cherishes the ring recipient. Personally, I think it’s a lot of “hogwash” designed to get people to spend a lot of their hard-earned money even before the “I do’s” are said.

Now if you have ever watched “Judge Judy” you probably have seen her tackle the question of what happens to the engagement ring if the engagement falls apart and the couple never marries. Well, this week’s question explores what happens to the engagement ring once the marriage has soured and the couple decides to divorce.

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Question: Is an engagement ring considered “marital property“?

Answer: Generally speaking, it is not. Typically, engagement rings are given prior to the marriage and are considered to be gifted by one party to the other in contemplation of marriage. Upon divorce, the engagement ring would generally be excluded from the marital property division. However, a wedding ring would be treated differently by Maryland courts.

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As with all things related to marriage, do not let your emotions trick you into making an impulsive decision. The consequences can be costly. Make sure that your greatest investments in the marriage are your, love, patience, commitment, and fidelity — not your money on the engagement ring purchased long before the marriage begins.

Cynthia Hawkins Clark regularly posts to this blog, her “What’s on Your Mind Wednesday” blogs which address questions we are frequently asked by our clients.

Marital v. Non-Marital Property Classification is extremely important in determining ad of issues that arise in a custody dispute and turn to issues related to the classification of property as marital or nonmarital. The first thing a Maryland family law judge must determine when deciding how to equitably divide assets that a married couple has acquired either jointly or separately is whether such property is marital property or nonmarital property.
This determination is significant. Property that a court decides is nonmarital will be excluded from equitable division by the court. In other words, if a court determines that a parcel of land, an automobile, or a house was acquired by one spouse alone, the other spouse will be precluded from laying a claim to any of the value associated with that property.

Most people have an intuitive sense of what belongs to them. In a divorce, spouses’ sense of entitlement and right to a certain property becomes even more keener. Countless family law clients have come in saying “I paid for that ___ (fill in the blank) out of my hard-earned money. It’s mine.” Others have come in dispirited saying, “I am at a loss, I put so much sweat equity in the house and made mortgage payments but my spouse never got around to putting me on the deed.” Well, as you will see with this week’s question and answer, your intuition regarding what’s mine and what isn’t may not serve you well in this area of family law.

*Marital Property is all property acquired during the marriage except by gift or inheritance and its classification is not directed by title to the property under Maryland family law.

Question: If my name is not on the deed to the family home but the home was purchased during the marriage, do I have any marital interest in the equity of the home?

Answer: Yes. Under the Maryland Family Law Code, property that is acquired during the marriage is considered marital property REGARDLESS of how the property is titled. There are a few exceptions to this rule. For example, if the home was acquired by inheritance or gift from a third party or the home has been excluded as marital property by a valid agreement between the parties then the Court will consider the property to be non-marital. ***************************************************************************
This all sounds very straightforward. However, making these marital property determinations can be more difficult than simply applying the above-stated rule to the facts in your case. Maryland courts have added more complexity (judges would call it clarification rather than complexity) to the rule through their various decisions. For example, Maryland courts have held that property will not be considered “acquired” before marriage unless 100% of the funds used to purchase that property are provided by one person alone from premarital funds. Therefore, a home that has been purchased in part since the date of the marriage will be considered marital property.

I know that may sound like a lot of legal mumbo jumbo so let me boil it down to a simple admonition. DO NOT SIGN A SEPARATION AGREEMENT DIVIDING UP PROPERTY WITHOUT FIRST SEEKING THE ADVICE OF AN Annapolis, MARYLAND FAMILY LAW ATTORNEY.