Dividing Retirement Benefits in the Case of a Maryland Divorce
In a divorce case, the division of property that the spouses acquired during the marriage can be a complicated and contentious matter. When the parties are not able to work out by themselves how to divide their marital property, the decision will be made by the courts. In Maryland, marital property is divided according to the law of “equitable distribution,” which means that an even split of marital property will not necessarily be the result. In applying the law of equitable distribution, the courts consider a variety of factors (such as the length of the marriage, the parties’ age and health, the parties’ economic situations and income) to come up with a property division that is equitable, or fair.
Equitable Distribution: Division of Retirement Assets in Maryland
Under a specific provision of Maryland law, after considering the factors listed above, among others, as well as any other factor that may seem appropriate and important, a court has authority to transfer an interest in a retirement plan or related investment from one spouse to either or both of the spouses in a divorce case. The court therefore has considerable discretion in determining how to divide the assets in a retirement plan. Late last year, the Court of Special Appeals of Maryland considered a narrow question in dividing retirement assets: When retirement account funds were divided between spouses, how to divide the account earnings (or losses) that accrued between the date of the divorce judgment and the date that the assets were actually transferred into a separate account for one spouse.
Division of Retirement Assets: Salkini v. Salkini and Allred v. Allred
In Salkini v. Salkini, the lower court decided, in dividing marital property, that the assets contained in the husband’s 401(k) account should be split equally between the husband and the wife and subsequently entered an order that provided that the wife’s share of the assets would be half of the balance on the date of the divorce judgment, adjusted for any earnings (or losses) on that share from the date of the divorce until the wife’s share of the funds were transferred into a separate account. The husband argued that the lower court abused its discretion, that the wife’s share of the assets was simply half of the total amount of the assets in the account on the date of the divorce, and that any investment earnings after that date were the husband’s sole property. The Court of Special Appeals rejected the husband’s claims. clearly the intent of the circuit court was to divide this marital property equally between the spouses.
In Allred v. Allred, however, the wife’s interest in the husband’s retirement account was fixed at a specific dollar amount in their marital settlement agreement. The agreement provided that the wife would receive that dollar amount, plus “investment experience” in the account “until the date of divorce.” In this case, the Court of Special Appeals held that the wife was not entitled to share in investment gains (or losses) that occurred after the date of divorce.
Questions About Dividing Marital Property?
If you have questions about dividing assets in your retirement accounts in a divorce, or about dividing other property, in Charles, St. Mary’s, Calvert, Prince George’s, and Anne Arundel counties, call 301.804.2312 to contact the family law attorneys at the Law Office of Robert R. Castro.
