When couples get divorced they are required to identify marital property and non-marital property. Many individuals don’t know what makes property marital and therefore, how they may unintentionally make a non-marital asset marital.
When couples get divorced they are required to identify marital property and non-marital property. Many individuals don’t know what makes property marital and therefore, how they may unintentionally make a non-marital asset marital. This week’s #FamilyFriday article defines marital and non-marital property and offers a few tips to protect your non-marital property.
Maryland defines marital property as any property – no matter how titled – acquired by 1 or both parties during the marriage. Individuals mistakenly believe that if the property, personal or real estate, is in their sole name it means that it is not marital – not true. By virtue of being married, what’s theirs is yours and what’s yours is theirs.
As logic flows, non-marital property is any property which was acquired prior to marriage. There are also some ways to acquire non-marital property during your marriage. These include an inheritance, a gift from a third person, an agreement between you and your spouse stating what is or is not marital, or any monies which were received through any of the above means. For example, if your parent passes and leaves you $10,000.00. You can put that $10,000.00 into a bank account in your sole name and still have that remain non-marital property.
How does non-marital property then become marital property? When you comingle the property. Take the example of receiving a $10,000 inheritance described above. Say you decide to transfer your inheritance into the joint account. Many would think that $10,000 of the balance of their joint account would remain non-marital since it was clearly from their inheritance. Wrong. The moment those monies were comingled, all of that money became marital property.
So, what do you do? One of two things: (1) keep non-marital property separate or (2) enter into a prenuptial or postnuptial agreement and define what each of you will maintain as non-marital property. You and your spouse can enter an agreement and list what property will be marital and what will not. That may include real estate, jewelry, bank accounts, etc. Or, you can keep it simple and keep your non-marital money separate.
Call ERA Law Group, LLC today at (410) 919-1790 to learn how to protect your non-marital property!
Due to a recent Supreme Court decision, a former spouse may now lose a significant amount of their ex-spouse’s military retirement pay despite what was awarded to them in their Judgment of Absolute Divorce.
On this week’s #FamilyFriday article, the attorney’s at ERA Law Group, LLC are discussing the recent change in how Court’s treat a service member’s waiver of retirement pay for disability benefits and the effects it may have on the former spouse. A service member’s retirement pay is considered marital property. Depending on the length of the marriage and the Court’s Order, a percentage of the marital portion of the retirement pay is reserved for the former spouse upon the service member’s retirement. Due to a recent Supreme Court decision, a former spouse may now lose a significant amount of their ex-spouse’s military retirement pay despite what was awarded to them in their Judgment of Absolute Divorce.
In Maryland, upon entering a Judgment of Absolute Divorce, couples negotiate what, if any, percentage of the service member’s retirement pay will be awarded to the former spouse. If a service member applies for and receives disability benefits, the Department of Veterans’ Affairs (DVA) automatically reduces the member’s retirement pension on a dollar-for-dollar basis. This automatic waiver prevents members from double dipping and receiving both retirement pay and disability benefits. In practice, in exchange for the disability benefits, a member’s retirement pay is decreased which also results in a decrease for the former spouse. Put simply, the former spouse will receive a smaller piece of the pie than what was originally contemplated.
Until recently, Maryland and many other states, treated the award of the service member’s retirement pay as a contractual arrangement. This permitted the former spouse to retain their agreed upon portion of the service member’s retirement pay if and when a service member obtained disability benefits or increased benefits after the divorce which resulted in a waiver of their retirement pay. The Court interpreted the waiver as a dilution of the former spouse’s share. Finding this arrangement unfair, Maryland Courts continued to enforce the award in the Judgment of Absolute Divorce. In other words, the service member was still required to pay the difference.
A recent Supreme Court decision, Howell v. Howell, has changed the way Maryland and other states have treated such circumstances. Now – regardless of what the award was – a former spouse is only entitled to receive a portion of the retirement pay even if that retirement pay is now significantly smaller. The Supreme Court suggested that state courts consider the unreliability of the former spouse’s portion of retirement pay when making a marital award and, if applicable, compensate the spouse elsewhere. For example, perhaps this would increase alimony or a lump sum award.
If you are a military spouse, call the attorneys at ERA Law Group, LLC today at (410) 919-1790 to ensure your rights and benefits are protected!
Many people get married and mutually agree that a divorce is what’s right for them. A divorce by mutual consent allows parties to file for divorce so long as there are no minor children and there is an agreement as to all property issues.
On this week’s #FamilyFriday article, the attorneys at ERA Law Group, LLC want to help you get divorced and quick. Many people get married and mutually agree that a divorce is what’s right for them. Prior to 2015, if you wanted a divorce you had to wait at least one year. The theory behind the wait period was to encourage partners to reconcile and hopefully avoid divorce. Fortunately the law has caught up with reality and in many cases, when you know you know.
A divorce by mutual consent allows parties to file for divorce so long as there are no minor children and there is an agreement as to all property issues. Determining whether you have minor children is easy but settling property can sometimes be difficult depending on the duration of the marriage and the property accrued. You and your spouse want to discuss and settle issues related to any joint bank accounts, cars, real property, debt, retirement, and alimony before filing for divorce. Hiring an attorney to draft the settlement agreement to ensure it contains all necessary contract language and covers all potential property disputes is important to make sure you truly have settled all property issues. Additionally, sometimes parties think they’re on the same page only to learn that they’re not. Discussing these issues initially allows for a smooth settlement and a true divorce by mutual consent.
Once you have your agreement signed you can then file for the divorce. Your spouse can come with you and immediately file their answer which avoids waiting for the summons and having to formally serve the Defendant. When filing for the divorce you must include a copy of your agreement so the Court is satisfied that there are no unresolved property issues. After you’ve filed, the Court will set an uncontested hearing for about ten (10) minutes. Some counties take longer than others but a good estimation of the time it would take to get divorced is three (3) months.
The attorneys at ERA Law Group, LLC offer fixed fee services to draft and finalize your agreement and handle your uncontested divorces. Call us today!
When there’s a large disparity in income, assets, debts, etc. some spouses fear life without the financial contribution from their spouse and ask if they would be entitled to alimony. The answer is maybe.
Spouses take on various financial roles in a marriage. Some stay home, some work part-time while the other is the breadwinner, and some play equal roles. When there’s a large disparity in income, assets, debts, etc. some spouses fear life without the financial contribution from their spouse and ask if they would be entitled to alimony. The answer is maybe. This week’s #FamilyFriday article breaks down the road to obtaining alimony.
In Maryland, the Court has a number of factors it must consider when determining an alimony award. Some of these factors include each parties ability to be self-supporting, a party’s ability to obtain suitable employment, length of marriage, standard of living, the age of each party, any agreements between the parties and the health of the parties. Some factors play bigger roles in the Court’s decision-making process than others. For example, a spouse married for 30 years, in their 60s, and having been a stay at home parent may be in a greater position of obtaining alimony than a marriage less than 5 years with both spouses making equal salaries.
After analyzing the various factors the Court can: (a) decline to award alimony, (b) award temporary alimony, or (c) award permanent/indefinite alimony. When presenting your case for an alimony award, your attorney should strongly advocate those factors which play an important role in your case. Your attorney should place emphasis on the length of marriage, the disparity in income, the likelihood of the less economically stable spouse to become more economically stable, the need for additional education, and, if applicable, highlight the circumstances surrounding the divorce. A party who has physically and emotionally abused their spouse who is seeking alimony would play a far great role in the Court’s decision making than the couple who is seeking a divorce based on a voluntary separation.
In the event you and your spouse can reach an agreement about alimony, you should also consider some potential alternatives. The alimony paying spouse may not want to have a monthly payment but may be willing to make a one-time large sum payment. For example, perhaps the alimony paying spouse would rather offer you their share of the equity in the home than pay you alimony each month for the next 5 years. When reaching an agreement you should speak with an attorney to be sure you don’t, or understand the consequences if you do, waive alimony.
Divorce is an emotional roller coaster. You may not know what questions to ask, what rights you have, and what you may be entitled to but the attorneys at ERA Law Group, LLC today can help!
There are two ways to dissolve a marriage: divorce and death. Prenuptial agreements help in making the dissolution as easy as possible.
There is a misconceived notion that asking for a prenuptial agreement or discussing it in some way implies distrust or concern over your relationship. This isn’t true! There are a significant number of benefits to obtaining a prenuptial agreement that the attorneys at ERA Law Group, LLC want to bring to your attention for this week’s #FamilyFriday article!
Marriage is both a romantic and business relationship. With very few exceptions nearly everything is or becomes marital. As such, nearly everything can become subject of costly litigation in the event of divorce or death. A well drafted and all-inclusive premarital agreement will limit many of these issues. For example, the agreement will identify what is and is not marital property, each parties’ rights in the event of death or divorce, predetermine rights and obligations for spousal support, inheritance, and more. In addition, the agreement will have a complete financial disclosure including each spouses’ assets, liabilities, and income.
There are two ways to dissolve a marriage: divorce and death. Prenuptial agreements help in making the dissolution as easy as possible. Prospective spouses should consider whether they want to be on the hook for their partner’s debt in the event of divorce or marriage? Whether they want their spouse from a second marriage to inherit more than their children from their first marriage? Whether they want their private business to be impacted in the event of divorce or death?
Why wait? Protect you, your spouse, and your family no matter what life throws at you. Call ERA Law Group, LLC today at (443) 906-3566!
Many individuals find themselves in a precarious situation when they decide to handle certain matters without an attorney. These “cost saving measures” sometimes result in quite a heavy burden.
This week’s #TuesdayTips article comes one day after a recent United States Tax Court ruling in the case of Summers v. Commissioner of Internal Revenue (Docket No. 32259-15). Many individuals find themselves in a precarious situation when they decide to handle certain matters without an attorney. These “cost saving measures” sometimes result in quite a heavy burden.
In this specific case, Mr. Summers and his wife divorced amicably and decided to move forward without attorneys. Pursuant to their agreement, Mr. Summers was to withdraw funds from his IRA and provide them to his wife. Typically, this is done via a Qualified Domestic Relations Order (QDRO). Pursuant to 26 U.S. Code Section 72(t)(1), distributions from a QDRO are exempt from the 10% additional tax typically imposed on early distributions. Unbeknownst to Mr. Summers, taking an early distribution made directly to himself would not qualify for the tax exemption even though he immediately transferred said funds to his wife for her sole benefit. As a result of an honest mistake, Mr. Summers was forced to suffer the 10% early distribution tax.
Don’t let yourself fall victim to an honest mistake. The attorneys at ERA Law Group, LLC offer fixed fee QDRO services! Call us today at (443) 906-3566.
If it’s time for you to begin the divorce process and end this chapter of your life, get organized and be prepared.
No one enters a marriage thinking or wishing for it to end. But, it happens. If you find this is happening to you and your marriage, know that you are not alone. Marriages end, homes are split, and the once unified family is now divided. Whether you’re the person seeking the divorce, the couple who mutually agree to divorce, or the person who has just been shockingly served, here’s what you need to know in Maryland.
Each family situation is different. There tends to be two roads to divorce: by agreement between the parties or by a Judge. If you have agreed how to handle any joint property and you don’t have minor children, you can get a divorce in Maryland without having to wait for any specific time period. This type of divorce is by Mutual Consent. If you do have minor children and/or maybe you haven’t settled all your property issues, you still don’t have to engage in war. Maryland provides a voluntary divorce option for couples to divorce after a 12-month separation.
Unfortunately, divorce does tend to bring out the worst in couples. In a situation where there has been a loss of trust, loss of a partnership, and, critically, a loss of communication, you need to be prepared to take action. First, know what assets exist and the approximate value. This may include property, retirement, personal property, vehicles, etc. Second, know what type of debt exists and how much. This can be in the form of a mortgage, outstanding credit card, a car loan, etc. Be aware that, for purposes of the divorce in nearly all circumstances, any asset or debt is joint – regardless of how either is titled – if it was accrued during your marriage. Lastly, and most importantly, prepare. Prepare for your monthly expenses, prepare for your children, prepare for you. Create a budget and adjust accordingly. You cannot be certain how the Court is going to rule regarding alimony or a monetary award. You may be confident that you will be able to remain in your home but what if that’s not the case? Your spouse may have once promised to financially support you but now things have changed.
You may require the assistance of an experienced family law attorney and this preparation will only make for a more successful case. Just remember, this too shall pass and you are not alone. Call me today at (443) 906-3566!