Marital or Non-Marital Property

Determining Whether Property is Marital or Non-Marital

We will examine the Melrod vs. Melrod case which goes in great detail how to distinguish between Marital or Non-Marital Property. 574 A.2d 1, 83 Md. App. 180 (1990). Whether property is non-marital or marital is critical solely with regards to the awarding a money award. FL § 8-203 shows that in a case for divorce or annulment whether there is an argument as to where certain property is non-marital or marital property wherein the court will make that determination which property has marital characteristics. FL § 8-204 mandates the court shall rule the value of all marital property. FL § 8-205(a) requires the court, once the court has decided which property has marital characteristics and value of that property, in order for the court to grant a monetary ward as an rights of the parties concerning marital property and an adjustment of equities. There are ten factors that the statute shows that the court is authorized to consider to providing a monetary award.

In FL§ 8-201(e), this statute defines marital property. Marital property is defined as any property, however titled, acquired by both or either the parties during the time of being married to each other. This statute exclude property acquired before the marriage as well as excluding property acquired vis-a-vie gift by a third party or inheritance. It also excludes property by valid agreement or property “directly traceable” to any of these non-marital sources.

The Harper Court of Appeals applied the theory which is named as source of funds, ruled that property is acquired if paid in installment. For property to be non-marital or marital depends on where the source of every payment are paid to acquire that property. As property has been attained by a party having a mortgage which occurred before the marriage start as non-marital property, however, when the payments for the mortgage are made out of marital sources of payment while in the marriage, the property then is marital-in-part with respect to the marital proceeds paid to attain the property has the non-marital characteristics. Harper v. Harper, 294 Md. 54, 448 A.2d 916 (1982).

In the Melrod case, the question whether certain properties of Mr. Melrod’s ownership interests are non-marital-in-part of in whole. Melrod shows that a portion of his income was not marital. Mr. Melrod owned properties that generated income that were not marital since he acquired before the marriage and prior to his marriage his father set up a trust for Mr. Melrod that gave him close to $5,000 a month as additional income solely to Mr. Melrod. Mr. Melrod did not make any attempt to separate his marital and non-marital income where both sets of income were commingled. Mr. Melrod acquired several properties during the marriage and has been paid during the marriage.

Mr. Melrod is not able to trace money to a specific particular part of funds. Property acquired during the marriage and does not have a valid agreement, is marital property unless the property can be directly traced to a not marital source of funds for the property. The Statute FL § 8-201(e)(2)(iv) does not include marital property if any property is attained while in the marriage is traceable directly to a not marital source. Because Mr. Melrod commingled his income with not marital sources with marital source, no specific amount of money is used to acquire property can be traced to a specific source. If one cannot trace property attained while in the marriage to a not marital source, this means all property has marital characteristics.

In one Example, Brodak v. Brodak, 294 Md. 10, 447 A .2d 847 (1982), where the Court of Appeals ruled that property bought with money from the husband’s not marital business where marital property. Husband’s source or income was marital in part because of wife’s efforts aid to maintain it. The Husband’s business could not be directly traced to a non-marital source. Also, in Gravenstine v. Gravenstine, 58 Md. App. 158, 472 A.2d 1001 (1984), where the Court ruled that securities bought with marital money and by investing the income from dividends attained prior to marriage were wholly marital.

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