Samantha Pollin: Thank you so much for having me!
Anyone who is either already in the process of a separation or divorce, or who is considering a separation or divorce from their significant other, should absolutely pay attention to this discussion – particularly people with a lot of wealth, or a lot of savings, or a lot of assets. People who own real property or real estate, business owners, people with significant income, anyone who has assets or financial resources that they want to protect – and who wants to learn what their rights are concerning those assets.
I practice in both Maryland and the District of Columbia, which actually do have fairly similar laws compared to some of the surrounding states and other states within the country. But both Maryland and D.C. provide for what’s called an equitable division of property. “Equitable” does not always mean “equal”. It can mean equal, particularly in a long-term marriage where people have acquired assets together over time. It may end up being a 50/50 split, but it doesn’t have to be. The court is required to consider many, many factors that are spelled out by statute and by case law for the judge to consider in determining what is ultimately fair and equitable.
Marital property – and this is assuming that there’s been no prenuptial agreement or any other agreement that defines or specifically excludes certain property – in Maryland is all property that’s acquired by either party or the parties together during the marriage. An important factor in both Maryland and D.C. is that it’s up to the date of the divorce. A separation does not automatically trigger funds to become separate. It’s up until the date of the divorce. The separation date does not impact the funds and assets that continue to be acquired by either or both parties: they are considered marital property. Marital property can be income, any funds that are earned by either party during the marriage regardless of how those funds are held. If they’re deposited into a jointly titled account, they are marital property – or frankly, if they’re deposited into a solely titled account, they can still be considered marital property despite being in just one party’s name
Marital property does not include any property that was acquired before the marriage or property that was received by gift or inheritance – so long as those funds are kept separate. For example, if somebody were to receive an inheritance from an elderly family member who has passed away, it’s important for that person to keep those funds separate if they believe that sometime down the line, there’s going to be divorce or some type of division of marital property. When funds are deposited into accounts that already have marital property, they can be what’s called “comingled” – which means that those non-marital funds, despite coming from either a gift or an inheritance, cannot be directly traced to a non-marital source, and the court may ultimately find that those funds have been commingled and therefore are part of the marital estate.
Particularly for people who come into a marriage with significant assets, they’re going to want to protect those assets in the event that the marriage doesn’t work out and they ultimately get divorced. Anything that you own prior to the marriage is going to be separate, non-marital property as long as you protect that asset.
Money is a little bit different than real property. Real property – if you own it outright and there’s no mortgage on it – is going to remain non-marital property no matter what happens, including living in it throughout the marriage. Money, however, as long as you keep it in a separate account, will maintain that separate, non-marital status.
If you start depositing non-marital funds or premarital funds into an account with earnings that you’ve acquired during the marriage, or with some other type of marital funds, you get into that gray area of commingling. You’re going to have a difficult time – or potentially a difficult time – trying to trace those funds to show the court or your spouse down the line that those funds have maintained some type of separate status and therefore should be excluded from an equitable division of property.
It’s important to have an attorney to get answers to your questions right off the bat if you have any concerns about property division.
A separation agreement is effectively just a contract between spouses that can include any and all issues pertaining to a separation or divorce. It can pertain to the custody of and access to minor children, child support, alimony, and/or spousal support, and any division of property including accounts, real property, personal property, and retirement assets. Attorney’s fees and payment of attorney’s fees for parties who have consulted with counsel can also be addressed in the separation agreement. All of these things can be resolved in a separation agreement prior to either party filing with the court or pursuing litigation and ultimately getting a divorce.
Agreements provide individuals with the ability to control and make creative decisions concerning the outcome of the case. People can contract for and agree to things that the court may not be able to order. Judges are bound by what the legislation says that they can do or not do – but people who are negotiating with each other can make some creative decisions, creative outcomes that the judges cannot. Judges do not have the ability to evaluate years of history between spouses given the short time that is usually allotted for a divorce or family law trial. My advice is always that it’s best to see what you can work out between each other, with or without counsel before you go down the road of litigation and having a judge involved in your case.
This comes back to having experienced counsel assist with the separation agreement. The agreements, provisions, and terms should be as specific as possible to avoid any ambiguity or confusion in the future. A skilled family law attorney can anticipate where specifications or clarifications might be needed to avoid future disputes, future litigation, or future fights over things that you thought were resolved by the separation agreement in the first place.
They don’t have to be. You can agree to separate and never ultimately pursue a divorce from the court. People do that for various reasons, including retaining health insurance, et cetera. There are reasons to separate but not divorce. However, a separation agreement can ultimately become part of your judgment of absolute divorce once the court grants the divorce.
In both jurisdictions, Maryland, and D.C., the courts are required to consider the best interest of the children. That’s always the bottom line. The judges have to evaluate a number of factors that will determine what they ultimately believe is in the best interest of each child.
There’s a difference between legal custody and physical custody, and that’s important for litigants and people going through this process to know. Legal custody pertains to the authority to make major decisions affecting a child’s health, education, religion, and general welfare, but that’s as to major decisions. It’s not necessarily the day-to-day. Physical custody is the schedule of where the child will be residing and when – an access schedule or a visitation schedule for the parents and the parties involved. There are infinite and creative ways to address legal custody and physical custody for a child or for children that come back to the idea of trying to work things out before you go to court. Obviously, parents are the ones who know their children best; working cooperatively, they can come up with some creative outcomes.
What is in a child’s best interest, however, is not easily defined. The appellate courts in Maryland and the legislature in D.C. have identified factors – but ultimately, judges have broad discretion, and they are not going to know your children as well as you do. That is really important to remember.
Lastly, to answer the second part of your question, D.C., unlike Maryland does have a presumption of joint custody. That presumption can be overcome if there’s evidence of abuse or other extenuating circumstances, but that’s where the court starts. Maryland does not have that same presumption: the court can just look at the overall factors and make a determination.
If parents can reach a custody agreement, that’s the best way to handle it. You know your children best, and you can make decisions that you think are going to work – not only now, but also in the future – for your children.
Statistically, most cases do settle out of court, and as we’ve already discussed, there are significant benefits to a settlement. It’s that control, it’s that creativity over the outcome. It’s you making the decisions as opposed to a judge who’s effectively a stranger that you’ve never met before making them for you. There are financial benefits as well to come to a resolution because litigation can be very, very expensive with attorney fees and potentially with other experts being involved if you have complicated issues.
My favorite saying is: “It takes two to tango.” Sometimes, despite one side’s best efforts and reasonableness, parties cannot reach an agreement or resolve their issues, and therefore the option is to go to court and ask a judge to make the decisions for them. That’s what the court is there for. The judge, whoever that person is, will hear all of the evidence and hopefully, make the best decision for you and for your family.
But it’s worth trying to negotiate at first if you can. It’s going to be better for you overall and again, it provides that type of control over the outcome. If you end up in litigation – or even if you’re attempting negotiation – you’re going to want an experienced attorney who handles these types of cases on a regular basis. That attorney can provide not only guidance and information but also some suggestions for creative solutions that the court may not be able to order.
Thank you so much. It’s been a pleasure.