What Happens to the Marital Home in a Maryland Divorce?
Curious about your marital home’s fate in a Maryland divorce? Unveil strategic choices and secure your future. Don’t wait, explore now!
Ownership of the marital home after a divorce depends on the individuals, their attorney, and what makes more financial sense. Deciding what happens to the house can shape the entire divorce property division process.
According to an NAHB 2020 analysis, in 43% of homeowning couples, the husband earned more than the wife. As a result, it’s not uncommon for the male to determine the state of their property after a divorce. However, not all relationships or situations are as cut and dry as that arrangement.
Here are your divorce settlement options for your marital home and the redistribution of assets.
What Happens to the House In a Divorce In Maryland?
Under Maryland divorce laws, the marital home is considered marital property if it was purchased during the marriage or paid for with marital funds. This goes even if only one spouse’s name appears on the deed. If the home qualifies as marital property, then it becomes subject to divorce property division.
Unlike some states, Maryland courts do not have the authority to transfer title of real property from one spouse to another. Instead, the court determines the value of the marital home and may issue a monetary award to achieve fairness. The court considers some factors such as the length of the marriage, financial and non-financial contributions, and whether minor children reside in the home.
Navigating your divorce successfully means understanding your options and assessing each spouse’s marital property rights. These are some of your divorce settlement options.
Buyout
With a buyout, one spouse keeps the house and compensates the other for their share of the home equity. This often requires financing the mortgage into one spouse’s name, which can be challenging if credit or income is an issue.
The two individuals will come to this agreement during the divorce proceedings. This allows the one leaving the property to afford relocation, which may otherwise be difficult if all their money is currently in the house.
Immediate Sale
Another option is an immediate sale. This provides a clean break and liquidity, but may be difficult on an emotional level and vulnerable to market conditions.
A court may order an immediate sale to stop foreclosure when spouses can’t afford the mortgage. If one spouse is damaging the property or letting it deteriorate, this can prevent asset decline. Alternatively, an immediate sale might happen when spouses can’t agree on selling or how to handle the asset.
The benefit of an immediate sale is that it provides cash for immediate expenses or to divide assets faster. It also allows the individuals to move away as soon as possible.
Deferred Sale
A deferred sale allows one spouse to remain in the home, often until children reach a certain age. The sale occurs later, with proceeds divided according to a pre-agreed formula.
For example, a deferred sale may happen so that the youngest child finishes high school or college. Alternatively, the agreement may set the sale date to 2, 3, or 5 years. Postponing allows for better market timing or financial adjustment.
Co-Ownership
In some cases, spouses agree to continue co-ownership for a limited time. They may rent the property or maintain it as an investment. In rare cases, spouses may agree to continue living on the property together or in separate rooms.
While uncommon, this arrangement can work if communication remains functional. Renting it out could provide passive income that helps them afford their new accommodations or support their child.
Separate Property
It’s important to understand that separate property may still have a marital component if marital funds were used to pay the mortgage or make improvements. A separate property is a home owned before marriage. That marital contribution can create divisible home equity in divorce.
Why Is Moving Out the Biggest Mistake In a Divorce?
When it comes ot divorce property division, moving out of the marital home too early can damage your claim to it. While leaving may feel like the quickest way to reduce conflict, it can undermine your marital property rights.
First, vacating the home can weaken your negotiating position. Judges and opposing counsel may view the spouse who remains as the “status quo” occupant, especially when children are involved. This can influence temporary use and possession orders, as well as long-term settlement outcomes.
Second, moving out does not relieve you of financial responsibility. You may still need to contribute to mortgage payments, property taxes, and upkeep. That goes even if you pay for separate housing.
Third, leaving the home may complicate access to important documents, personal property, and evidence related to your divorce. In contentious cases, the remaining spouse may restrict access or claim exclusive possession.
Finally, in high-conflict divorces, the court may interpret moving out as abandonment. You’ll want some kind of written agreement or court order clarifying the reason for your departure.
There are situations where leaving is appropriate, such as with domestic violence cases. In most scenarios, remaining in the marital home until legal guidance is obtained protects both financial and strategic interests.
Home Equity Divorce Considerations
Home equity is often the largest marital asset. Calculating it accurately is critical. Equity equals the home’s fair market value minus outstanding mortgage debt and liens.
In a home equity divorce scenario, disputes often arise over valuation. One spouse may argue for a higher or lower appraisal depending on the desired outcome. Courts typically rely on professional appraisals or agreed-upon valuations.
Marital funds used to reduce the mortgage balance or improve the home increase marital equity. You can expect this even if the house began as separate property. Conversely, passive appreciation of separate property may not always be divisible.
Equity division does not always mean splitting proceeds. Maryland courts may offset one spouse’s share of home equity by awarding other assets, such as retirement accounts or investment funds.
What Assets Are Untouchable In a Divorce?
Not all property is subject to divorce property division under Maryland divorce laws. The court may classify certain assets as separate property, and they are generally untouchable.
These often include:
- Property owned by one spouse before the marriage
- Inheritances received apart from each other
- Gifts made to one spouse alone
- Assets excluded by a valid prenuptial or postnuptial agreement
Marital property rights state that you can also lose rights to money through commingling. This happens when separate and marital money mix. It can change the asset’s status, such as when inherited money is used to pay a joint bill. Courts look at how the couple used the money, not where it came from.
Maryland Divorce Laws and Judicial Discretion
Maryland courts have broad discretion when determining equitable outcomes. Judges consider statutory factors, including contributions to the family, economic circumstances, and future earning capacity.
Because courts cannot directly award title to the marital home, monetary awards often play a central role. This makes proper documentation, valuation, and strategic negotiation essential.
Judges also consider fairness in light of the entire marital estate. A spouse may receive a greater share of home equity if offset by fewer retirement or liquid assets.
Frequently Asked Questions
Can I Force My Spouse to Sell the Marital Home?
Not at first. While a court can determine each spouse’s financial interest, it cannot force a sale unless both parties agree. Alternatively, it can happen if the home is owned by both individuals and is subject to partition through separate legal action.
The best way around this is through a pre- or post-nuptial, which can establish ownership of the property.
What If the House Is Only In My Spouse’s Name?
The title alone does not determine ownership in divorce. If you acquired or maintained the home with marital funds, the court may still consider it marital property subject to equitable distribution.
Do I Lose My Rights If I Move Out?
Moving out does not eliminate ownership rights. It can weaken your practical leverage in negotiations and temporary orders, especially regarding possession, though. Keep in mind that moving out may be unavoidable in certain situations, and even encouraged, for your safety.
How Does Debt Affect Home Equity Division?
Mortgage balances, home equity loans, and liens take away from the home’s value before the court divides equity. You can allocate responsibility for ongoing payments separately.
Can We Keep the House for the Kids?
Keeping the house is common in situations such as joint custody. Some couples choose deferred sale arrangements to maintain stability for children, though this requires careful planning and clear terms. Both parties can stay in the house together, or they can even rent it out to help pay it off before gifting it to their children.
Determining the Ownership of a Marital Home
The marital home plays a central role in many Maryland divorces, both for each person’s finances and emotions. Whether they sell the house, retain it, or share temporarily, decisions surrounding it can shape the entire divorce settlement. Divorce laws prioritize equitable outcomes, not equal ones, making preparation and strategic planning critical.
The Blattner Family Law Group is here to guide families through these tumultuous times. We can help you create a step-by-step plan to secure a better future for your family. Contact us with any questions and to set up a consultation.