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March 25, 2025 • 18 mins

Unlock the secrets of equitable asset division in divorce as host Cary Jacobson, attorney and mediator, guides you through one of the most challenging aspects of marital separation: dividing assets. Ever wondered how your assets would be categorized if you were to part ways with your spouse? Cary demystifies the distinction between marital and separate property, and explore how premarital assets, gifts, and inheritances play into the equation. With insights into the strategic use of pre-nuptial and post-nuptial agreements, you'll discover how to safeguard your interests and minimize conflict, making the divorce journey a bit smoother.

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Episode Transcript

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Speaker 1 (00:00):
The only time I have experienced a scenario where a
judge has divided assets outsideof what would normally be the
50-50 is because one spouse washiding money or used money and
it couldn't be accounted for.
So basically, what they did wasadd that pot of money back into

(00:24):
the equation and then divide it.

Speaker 2 (00:29):
Welcome to Divorce Diaries, where attorney Keri
Jacobson brings you real stories, hard truths and practical
advice on navigating divorce andfamily law.
Whether you're going through it, considering it or just curious
, this is your place for clarity, confidence and resilience.

Speaker 3 (00:51):
Well, welcome back to Divorce Diaries, charlie
McDermott co-hosting today withKeri Jacobson.
Keri, how are you doing?

Speaker 1 (00:59):
I'm doing well.
How are you?

Speaker 3 (01:01):
I'm doing terrific.
Yeah, looking forward toanother awesome episode.
Boy, that last episode, as Imentioned, and for your
listeners who are consideringdivorce, you know and want to
just be prepared ahead of timeand know what we're getting

(01:21):
ourselves into at navigatingalimony episode that you did is
definitely a must watch and orlisten to.
So a great job on that.
And you know you just keepraising the bar.
So for this episode you aretalking about dividing assets.
Are you ready?

Speaker 1 (01:41):
I am.

Speaker 3 (01:42):
All right, love it, love it.
So let's start with.
What does property divisionmean in the context of divorce?

Speaker 1 (01:51):
So when we're talking about property division in
divorce, we're really talkingabout dividing the assets that
the couple has acquired, thosethings that they've purchased
over the time that they've beentogether.
So it could be their house, itcould be cars, it could be stuff
in their house and even thoseother intangibles such as bank

(02:16):
accounts and retirement accounts, and even businesses, and even.

Speaker 3 (02:22):
So then, what's the difference between marital and
separate property?

Speaker 1 (02:28):
So in Maryland the way that we define marital
property is anything that eitherparty in the relationship has
acquired during the term of themarriage.
So it doesn't matter how thatasset is titled.
So it doesn't matter how thatasset is titled, so it doesn't
matter if it's in one spouse'sname, the other spouse's name or
even if it's jointly titled.

(02:49):
As long as it was earned oraccumulated during the marriage
itself, it is considered to be amarital asset.
There are some exclusions tothat, some of that being assets
that are premarital, so thingsthat someone came into the
marriage with.
Many times we see this, as youknow.

(03:12):
Probably the most commonexample is your retirement
account.
You've been working for a fewyears and maybe your account has
$50,000 at it.
When you get married, that$50,000 would be a premarital
asset and would be separateproperty.
But what can happen is youcontinue to work at that job

(03:35):
after you're married, so for thenext 10 years, and now you've
earned another $100,000.
So that extra $100,000 thatyou've earned during and saved
during the marriage would bemarital property, so it can be
partially marital and partiallynon-marital.
Another thing that is oftenexcluded is if you received a

(03:57):
gift from a third party, whetherit's your parents.
Um, you know, someone else hasgiven you a financial gift or
maybe it's an asset and thosethings that you may otherwise
inherit from someone.
So if you were to receive, asan example, you know, a
financial gift or an inheritancefrom your parents when they

(04:17):
pass away, that inheritance intheory is separate property,
unless you commingle it in anaccount with other mineral
assets.

Speaker 3 (04:28):
So it can get complicated.
Wow.
And then, of course, you havepre-nuptial agreements.
Do you see much of that inthese?
Absolutely yes.

Speaker 1 (04:41):
So there are assets that can be excluded by way of
the pre or post postnuptialagreement.
We do a lot of those forclients.
So if you've specificallycarved out assets in those pre
and postnups, that's going todefine what's going to be
marital and what's going to benon marital?

Speaker 3 (05:02):
what's going to be marital and what's going to be
non-marital.
Okay, okay, well, so I I guessit's important to and you said
your firm does pre-nuptial andpost-nuptial, so so I've never
heard that term before.
So that's after you're married,all of a sudden you wake up one
day and go should have done itmaybe before I got married, but

(05:24):
let's do it now.
Is that kind?

Speaker 1 (05:26):
of.
Well, it can be, um, it couldbe one that you plan to do it
and you just didn't get it off.
You didn't check it off thechecklist before you got there.
So we have people that you knowneed to post up in that
scenarios.
And then I've had otherscenarios.
I honestly think most of thetime it's because one of the
spouses has started a businessthat is the most common time we

(05:49):
see a postnup, but I've also hadissues where one spouse may
have had different spendingissues throughout the marriage.
And they want to put someprotection there, issues where

(06:09):
one spouse may be like gettinginto gambling debt and they want
to protect the other from, youknow, those kinds of debts.
So there's lots of scenarioswhy a post-nob may come into
play.

Speaker 3 (06:21):
Hmm, okay, interesting, all right.
So then, how do courts decideon a fair division of assets?

Speaker 1 (06:30):
So here in Maryland we are considered to be an
equitable distribution state.
So in theory, what that meansis a judge is supposed to take
into consideration all thedifferent things that are going
on at the time of the divorce.
All the different things thatare going on at the time of the
divorce, basically how much, howmany assets each party has in

(06:58):
their own name.
That's going to be separate.
How the assets or if you have,like, the inheritance on your
you know, on your side of thatsort of thing there's lots of
different things they take aresupposed to take into
consideration.
But in practice what I honestlyhave seen over, you know, over a
decade of doing this, at theend of the day it comes down to,

(07:20):
marital property is going tomost likely be split 50-50.
Even though there are otherfactors, you know, such as fault
, that can play a role in theory, they almost never do.
The only time I haveexperienced a scenario where a
judge has divided assets outsideof what would normally be the
50-50 is because one spouse washiding money or, you know, used

(07:47):
money and it couldn't beaccounted for.
So basically, what they did wasadd that pot of money back into
the equation and then divide it.
So really, it's in thosescenarios where there's some
dissipation, as we refer to it,of assets would be where I've
seen a scenario where it's not50-50.

Speaker 3 (08:08):
Okay, okay, and so dividing complex assets.
I know you touched on theretirement accounts, but complex
assets like businesses,pensions, investments, how are
they divided?

Speaker 1 (08:30):
Each one's kind of done a little bit differently.
So when we're dealing with abusiness, many times we may need
to have that business evaluated.
You know, have an appraisercome in to determine how much is
that business worth.
You know, have an appraisercome in to determine how much is
that business worth.
Sometimes it is really justsweat equity or you know the

(08:54):
person's goodwill and it'sreally not going to be able to
be sold to a third party withoutthat person in the business.
So it doesn't have a lot ofextrinsic value itself.
But then you know there areother times where the business
can really run without thatindividual and it's worth
something and could be sold to athird party.
So in those scenarios you knowit's potentially dividing the

(09:19):
value of that business.
The question is where do thefunds come from?
And so really looking at whatthe options are, you know to pay
that spouse out for their shareof the business.

Speaker 3 (09:31):
Wow yeah.

Speaker 1 (09:34):
When we're dealing with retirement accounts and
pensions.
It depends on the type ofaccounts that we're dealing with
as to how they are divided, butthere can be.
The biggest piece to take awayis that the division of
retirement accounts is nottaxable as long as it's going

(09:54):
from one retirement account toanother, so neither spouse will
actually have to pay taxes onthe division of that asset.

Speaker 3 (10:02):
Okay, okay.
Well, that's good, one of thepositives of getting into work.
All right, let's talk about therole appraisers or financial
experts play.

Speaker 1 (10:19):
Yeah.
So, as I mentioned, you know,definitely important when we
have a business.
You know definitely importantwhen we have a business.
It can be important when we'redealing with property, real
property.
So if the intention is todivide the value of the house
and one spouse wants to stay inthe house, then we need to
determine how much the house isworth, and so in that scenario

(10:49):
we often will rely on anappraiser to determine what that
value is.
And sometimes you know ifthey're going to sell the house,
then we don't necessarily needthe appraiser because it's
whatever the house is sold forright.
Every once in a while, though itdoesn't come up as often there
may be scenarios where personalproperty within a home needs to
be valued.
But I think one misconceptionis most people think it's going

(11:13):
to be how much I purchased theseassets for.
You know, did I pay $10,000 forthe furniture?
That's probably not what thevalue would be.
When we're dividing.
It's really like fast sale,flea market value.
How much would you get if youput it on Craigslist, facebook,
marketplace or whatever else you?
Know, if you were to sell ittoday.

Speaker 3 (11:35):
Okay, okay.
So how can individuals protecttheir interests during property
settlement discussions?

Speaker 1 (11:46):
First and foremost is to do an inventory of all of
the assets, really determinewhat everything is I don't
necessarily mean the furniturein the house, but the house, the
cars, your bank accounts, yourbrokerage accounts, your
retirement accounts, all ofthose big assets.

(12:08):
And then going back to thatnon-marital portion, did you
come into the marriage with anyvalue in those accounts?
So ideally you can go back toold statements.
You know to find thatretirement statement that shows
you had the $50, statements youknow to find that retirement
statement that shows you had the$50,000 in the account prior to

(12:29):
the marriage.
So really digging through andlooking for those that
documentation can be reallyhelpful.
And then back to the pre andpostnup.
You know having having one tobegin with is ideal.

Speaker 3 (12:46):
OK, good tip there.
Speaking of which, any tips onwhat you should avoid when
dividing assets.

Speaker 1 (12:58):
I think one of the most common things people that
comes up is trading taxableassets for non-taxable assets,
and so most couples that we workwith the majority of their
wealth is in their retirementaccounts and in their equity in

(13:19):
the house, right?
And so what often happens isone spouse wants to stay in the
house, and so now they need topay the other spouse a portion
of their equity, right.
Well, where are they going toget the money to?

Speaker 3 (13:36):
do that.

Speaker 1 (13:37):
Right, and so their options at this point are
refinance and take out a newmortgage, which right now is
probably going to besubstantially higher than it was
before, at a higher interestrate, or they may either not

(13:57):
take a portion of the otherspouse's retirement or pay, you
know, do some sort of exchangeof the retirement assets for the
house.
What doesn't happen is thinkingthrough the fact that when you
are going to pull that money outof the retirement account,
you're going to have to paytaxes on it.
So you know, taking that intothe equation and bumping it up

(14:25):
to equate to what the housevalue would be is one thing to
really just be mindful of.
Make sure you're trading, youknow, the same dollars for
dollars.

Speaker 3 (14:37):
Yeah, yeah, that's a really good point.
Okay, how about our listenerswho are trying to prepare for
property division discussions?
Any tips there?

Speaker 1 (14:52):
So, again, going back to making that list of all of
the assets, also recognizing,you know, not every spouse has
been the person in charge of thefinances in the relationship,
so some of that's going to bedoing some investigation Right.
If you have not been handlingthe money in the in the family,
you may not know what there is.

(15:13):
So the very first step isstarting to learn what those
assets are, and that can beasking your spouse if things are
going well and communication is, you know, effective.
But if not, going back throughold records, finding tax returns
, that's probably a great sourceof information because it's

(15:35):
going to show if you've receivedinterest from an account.
It's going to have a lot ofinformation in there.
Maybe you don't necessarilyunderstand it, but you can take
it to a professional and theycan assist.
Looking at you know, did youhave any reason to believe that
either of you had an account atany particular time?

(15:57):
Any source of information anddocumentation is going to be
helpful in learning more aboutthose assets.
And so that's the first piecereally diving in and seeing what
there is.

Speaker 3 (16:11):
To begin with, Okay, Okay, so Carrie any tools,
resources that you can recommendprofessionals for your
listeners.

Speaker 1 (16:23):
So you're going to hear a lot of the same
recommendations that I gave lasttime.
The first is on our website, wedo have templates for your
assets so you can really look atwhat your assets are and also
the liabilities your mortgage,your car payment, those types of

(16:44):
things.
And then, as far asprofessionals, again, I'm going
to make a plug for the CDFAsthat I work with, because they
can really be a great source ofinformation and assistance when,
you know, trying to determinewhat the best way to divide
assets are so that you don'thave, you know, as high tax

(17:08):
implications.

Speaker 3 (17:10):
Terrific, terrific.
And yes, just to reinforce whatCarrie just said, and we will
say it over and over again,because the resources that you
and your team, Kerry, provideare phenomenal, and they're on
JacobsonFamilyLawcom and notonly specific to what we covered
today, but there are otherresources on there as well.

(17:32):
So, and feel free to sharethese episodes with friends,
anyone that can use both theinformation that Carrie's
sharing as well as the resourceson the website.
Again, it'sjacobsonfamilylawcom.
Carrie, once again, you knockedit out of the park.
Thank you for your time todayand we will see you in the next

(17:53):
episode.

Speaker 2 (17:54):
You as well, thank you day and we will see you in
the next episode.
You as well, thank you.
Thanks for joining us today onthis episode of Divorce Diaries.
Remember, every journey isunique, but you don't have to
navigate it alone.
Visit JacobsonFamilyLawcom orcall 443-726-4912 for support

(18:16):
and guidance.
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