Divorce can be a challenging time, especially when it comes to dividing assets. Unfortunately, there are many misconceptions that can make the process even more confusing.
Understanding common myths can help a person navigate the division of assets more effectively.
Misconception #1: Equitable division means a 50/50 split
One common misconception is that the court will divide marital property equally between spouses. Actually, Maryland’s principle of equitable division means that the courts seek to divide marital property fairly but not necessarily equally.
Courts consider various factors in the decision. Common concerns are the length of the marriage, each spouse’s financial contributions and their future earning potential. Therefore, when one spouse may receive a larger share of the assets to achieve fairness rather than mathematical equality.
Misconception #2: Businesses and retirement assets are untouchable
Some believe that stakes in a business or retirement accounts are exempt from division. However, these assets can also be marital property if an individual acquired them or increased their value during the marriage.
This accounts for how a spouse’s direct or indirect assistance allowed the other to achieve financial success outside of the home. Consequently, businesses, 401(k) plans, IRAs and other retirement assets can be subject to division.
Misconception #3: A single name on a title makes an asset separate property
Another myth is that assets that have a title under one spouse’s name are off-limits. In the eyes of the court, any assets either partner acquires during the marriage are typically marital property, regardless of whose name is on the title. For example, one spouse may purchase a car or a piece of real estate after getting married. In such cases, the court will usually consider this as marital property and subject to division.
Navigating the division of assets in divorce can be complex, but understanding these common misconceptions can help simplify the process. Before going through the proceedings, a person should have a clear understanding of his or her rights and devise a strategy for getting a fair resolution.