Non-Marital Property In A Maryland Divorce

When a couple divorces in Maryland, all of their property is divided into two categories: marital property and non-marital property. Non-marital property was acquired before the date of the marriage or through inheritance or gift after the marriage; whereas, marital property is any other property that was acquired during the marriage.   In other cases, a spouse may keep property separate from the marital estate because of agreements contained in a prenuptial or post-nuptial agreement.

There are, however, some exceptions. These exceptions generally have to do with the commingling of marital and non-marital property. As an example, a spouse may use a bank account in his/her name to pay off marital debt or put a downpayment on a marital home. In other cases, the appreciation of non-marital property (or the rise in value) can sometimes be considered a part of the marital estate. In this article, we’ll discuss the appreciation of separate property and when it becomes marital property.

When appreciating non-marital property becomes marital property 

In general, we’re discussing a scenario in which a spouse owns non-marital property, that property accrues value during the marriage, and the accrued value becomes part of the marital estate or non-separate property. How does this occur?

In general, if non-marital property increases value during the marriage without either spouse contributing efforts to the appreciation in value, the property remains non-marital property. As an example, if one spouse invested money before the marriage and left funds in an investment account that accrued value during the marriage, the property will still be considered the property of the spouse who made the investment. Neither party contributed to the appreciation of the property and thus, it remains the sole and separate property of one spouse. If, however, non-marital property appreciates during the marriage due to actions taken during the marriage, the property can then be reclassified as marital property and subject to equitable distribution.

In some cases, an asset may appreciate value during the marriage and partially become marital property. As an example, let’s say that a spouse purchased a vacation home prior to a marriage and owned the property outright at the outset of the marriage. The vacation home accrues value during the marriage and when the parties get divorced, the vacation home is worth $50,000 more than it was when it was purchased by the original spouse. The $50,000 in appreciated value could be considered property of the marriage depending on the circumstances surrounding the appreciation. However, the initial value of the home would still be considered the property of the one spouse. This can get somewhat complicated which is why forensic accountants often weigh in when it comes to asset distribution in high-asset cases.

Talk to a Maryland Family Law Attorney Today 

The Bel Air family law attorneys at Schlaich & Thompson, Chartered represent the interests of spouses currently attempting to divorce. We can help you with complex areas of Maryland law related to the appreciation of non-marital assets and more. Call our office today to schedule an appointment and learn more about how we can help.