Understanding Marital vs. Separate Property in Military Divorce: Maryland and Virginia

Understanding Marital vs. Separate Property in Military Divorce: Maryland and Virginia

Dividing assets in a military divorce can be complicated, especially when frequent moves result in property being accumulated across different states. Each state applies its own rules to determine what is considered marital property—subject to division—and separate property—which remains with the original owner. For military families, who often relocate and accumulate assets in multiple locations, understanding these distinctions is crucial.

This blog focuses on how Maryland and Virginia, two key states for military families, treat marital vs. separate property and how frequent military moves can make property division even more complex.

1. Marital vs. Separate Property: An Overview

Marital property generally includes all assets acquired by either spouse during the marriage, while separate property includes assets acquired before the marriage, through inheritance, or by gift to one spouse alone. However, states differ in how they define these terms and apply them in a divorce.

In a military context, this can include complicated assets such as:

• 401(k) accounts
• Thrift Savings Plan (TSP)
• Home equity
• Vehicles
• Newly purchased housing

Determining whether these assets are marital or separate is essential for a fair division, and military service can complicate this process due to frequent relocations and changes in financial circumstances.

2. Property Division in Maryland

In Maryland, the state follows an equitable distribution approach to dividing property. This means that, rather than automatically splitting everything 50/50, the court divides property in a way that it deems fair. Factors the court considers include the length of the marriage, contributions of each spouse, and future financial needs.

• Marital Property Definition in Maryland: Maryland defines marital property as any property acquired during the marriage, regardless of who holds the title. For example, if you buy a house while stationed at a military base in Maryland, it is likely to be considered marital property if purchased during the marriage.
• Separate Property: Anything owned prior to the marriage, or received as a gift or inheritance, is considered separate property. However, if separate property is "commingled" (for example, depositing inheritance money into a joint account or using it to pay down the mortgage on a marital home), it may be reclassified as marital property.
• Cutoff Date for Marital Property: In Maryland, assets acquired up until the date of the divorce are typically considered marital property. This includes retirement contributions, home equity, and any investments made during the marriage, making it essential for military spouses to keep track of their financial history, especially after separating.

Military-Specific Considerations:

• Military pensions: Under the Uniformed Services Former Spouses' Protection Act (USFSPA), Maryland courts can treat a military pension as marital property and divide it accordingly. The division of military pensions typically depends on the number of years of marriage that overlapped with military service.

3. Property Division in Virginia

Virginia, like Maryland, follows an equitable distribution approach but has a key difference in how it treats property acquired after separation.

• Marital Property Definition in Virginia: In Virginia, any property acquired during the marriage is presumed to be marital property, regardless of who holds the title or how the property is titled. This can include assets like 401(k) accounts, home equity, vehicles, and retirement benefits like TSP.
• Separate Property: As with Maryland, separate property includes property acquired before the marriage, inheritances, and gifts to one spouse. However, if separate property is mixed with marital property or used to benefit the marriage (e.g., using separate funds for a down payment on a marital home), it may be subject to division.
• Cutoff Date for Marital Property in Virginia: Unlike Maryland, Virginia law treats property acquired after separation as separate property. This means that once you are legally separated, any income, assets, or acquisitions after that point will not be subject to division in the divorce, even if the divorce itself is not finalized.

Military-Specific Considerations:

• Military pensions: Similar to Maryland, military pensions in Virginia are subject to division under the USFSPA. Virginia courts consider the length of the marriage and the number of years that overlap with military service when dividing military pensions.

4. How Military Relocations Complicate Property Division

Military families often accumulate property in multiple states due to frequent Permanent Change of Station (PCS) moves. For example, a military family may own a home in Virginia, have retirement savings in Maryland, and maintain vehicles registered in another state. This creates additional layers of complexity in determining which state’s laws apply and how assets will be divided.

• Jurisdiction: One of the first challenges is determining which state has jurisdiction over the divorce and property division. Jurisdiction is typically determined by where the military spouse is stationed, where the couple resides, or where they have established legal residence. Knowing which state’s laws will apply is crucial for protecting your financial interests.
• Commingling of Assets: Military families often use funds acquired in one state to purchase or improve property in another. For example, a service member might use their TSP contributions (made during a deployment) to purchase a home after a PCS move. This commingling of assets across state lines further complicates the classification of marital vs. separate property.

5. Why Work with a Military Divorce Attorney?

Dividing property in a military divorce requires an in-depth understanding of both state law and federal military regulations like the USFSPA. Our firm, founded by former JAG attorneys, is uniquely positioned to help you navigate these complex issues. Whether you're dealing with assets across multiple states, military pensions, or home equity, our team can guide you through the intricacies of equitable distribution and community property laws, ensuring a fair division of assets.

Conclusion

Dividing marital and separate property in a military divorce is never simple, especially when frequent relocations and state-specific laws are involved. Understanding how Maryland and Virginia treat property division, and knowing which state’s rules apply to your assets, can help protect your financial future. If you're facing a military divorce and need personalized legal advice, contact our firm for assistance in navigating these challenges.

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To learn more about dividing property in a military divorce, explore the topics in the drop-down boxes below or schedule a consultation with one of our experienced attorneys. Call us at 301-952-9000 or use our online scheduling link (CLICK HERE) to get started.

Disclaimer: This blog is for informational purposes only and does not constitute legal advice. Reading this blog does not create an attorney-client relationship. For specific legal advice, please contact Patriots Law Group directly.