Dividing Bank Accounts in a Divorce
Here is an interesting case we argued in the Maryland Court of Special Appeals about dividing bank accounts in a divorce.
The parties had two savings accounts at the time of their Maryland divorce, worth $86,075.66 and $23,228.33. The accounts were in the husband’s name. Since they were acquired during the marriage, they were marital property.
If you were the judge, you might be tempted to say the savings accounts “shall be equally divided between the parties.” That is indeed what the trial judge said.
But you would be wrong.
Dividing Bank Accounts in a Maryland Divorce
The starting point to remember in Maryland for dividing property is that the court may not transfer ownership of property (with two exceptions — pensions and “family use” property).
The court did not have authority to divide the savings accounts. That would require transferring assets from the husband’s name to the wife’s name. And it breaks the rule that the court may not transfer ownership of property.
Section 8-202(a)(3) of the Family Law Article of the Maryland Code says: “Except as provided in Section 8-205 of this subtitle, the court may not transfer ownership of personal or real property from one party to the other.”
The Court of Special Appeals reversed the decision. It sent the case back to the trial judge with instructions. The trial judge needs to count the savings accounts as belonging entirely to the husband.
Adjustments Are Made in the Marital Award
The court then uses the Marital Award to adjust the equities. That means to make things more fair but not necessarily equal. A Marital Award is like a judgment in favor of one party against the other. In our case, for example, the wife can use her marital award to attach the husband’s bank accounts if he doesn’t pay her voluntarily. The appeals court said the trial court should adjust the marital award by half the total of the two savings accounts, adding approximately $55.000 to the wife’s marital award.
So the process is:
(1) Don’t transfer ownership of property.
(2) Indentify who owns what
(3) Adjust the result through the marital award.
(4) Don’t short cut these steps or take them out of order.
Zanini v. Abdullahi, Case No. 2390 (2019)