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5 Things to Consider in a Divorce Negotiation Process in Maryland

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Couple upset with one another

Other than death, few life events are more stressful than divorce. When you are going through the divorce negotiation process, it’s easy to think in terms of harming your ex-spouse rather than helping yourself. In the long run, that is not a productive strategy. Protect your own interests by finding good legal representation and gathering as much documentation about your marital financial life as possible. Stay cordial, even if that is difficult. Concentrate on negotiating a settlement containing benefits for both of you.


  1. Equitable Distribution

Maryland is an equitable distribution – not a community property – state. That means you are not necessarily entitled to half of the marital assets. Instead, property is divided in a “fair and equitable manner.” The court takes various factors into consideration when deciding what is equitable. These include the marriage duration, age and health of the spouses, the circumstances leading to the end of the marriage and each person’s current economic position. It is a process with considerable flexibility and subjectivity.  Keep in mind that equitable distribution encompasses not only marital assets, but also marital debts.


  1.  Assets You Can Afford vs. Those You Cannot

It is crucial to take a long, realistic look at your near-future finances. No matter how attached you are to certain marital assets, especially a house, boat, or some other high-value item, do not waste time negotiating for an asset you cannot maintain in your post-divorce situation. You are already under considerable stress. You do not need the added stress of “winning” this particular piece of marital property when you know or suspect you cannot afford to keep it.


  1. Tax Considerations

In divorce as in other financial matters, it is not what you receive, it is what you keep. Without proper planning, receipt of certain assets can generate a big tax bill. That is especially true with retirement accounts. If the right procedures are not followed, the spouse receiving a share of the other’s retirement assets can get hit with a huge bill from the Internal Revenue Service. The same holds true for capital gains taxes on stocks and mutual funds transferred to another party. If there is substantial marital property, ask your divorce lawyer for a recommendation for a tax attorney. You do not want to go through divorce proceedings only to end up in tax court.


  1. Alimony

All alimony agreements are made during the divorce negotiations. If a spouse did not want alimony at the time of the divorce, he or she cannot come before the court after the divorce is granted and make a claim for such payments. In Maryland, the majority of alimony awards are rehabilitative, given for several years and allowing the receiving spouse to go back to school or otherwise establish financial independence. Indefinite alimony is now the exception, but may be awarded based on many of the same factors making up equitable distribution considerations.


If you and your spouse cannot negotiate an agreement regarding alimony, the court makes the decision. In most cases, it behooves you to come to an agreement with your spouse on this issue. Either party may not like the court’s decision.


If you receive alimony, you must pay taxes on the payments. If you are paying alimony, you can deduct those payments against your adjusted gross income. Just make sure the agreement makes it clear that those payments are alimony – not a property settlement or expanded child support.


The spouse paying alimony should purchase a life insurance policy as part of the divorce settlement, with the former spouse as irrevocable beneficiary or owner. If the paying spouse dies, the life insurance policy ensures that alimony and/or child support payments are addressed.


  1. College Expenses

If you have young children, you are already negotiating for custody, visitation, child support and related issues. Those are not topics that may fall by the wayside during the negotiation process. In the heat of deciding your children’s immediate future, their long-term prospects may go on the back burner – including who will foot college bills. Negotiate these expenses now. A Maryland court cannot order either parent to pay college expenses. By the time your child is ready for college, he or she is a legal adult at 18 and generally no longer eligible for child support. If your divorce agreement stipulates how college expenses are paid, that agreement is enforceable by the court.


Contact an Attorney

People dealing with the divorce process are in a particularly difficult and vulnerable state. You need a Maryland divorce lawyer who will fight for your interests and ensure you receive the best possible settlement. If you are in the Baltimore or D.C. metropolitan areas, call Blackford & Flohr today at (410) 647-6677 for a consultation.