Sims v. Sims (2024) & Assets Acquired during Separation

When Maryland courts go about the process of equitably distributing marital assets, a multi-step procedure must be followed in all instances. The first step in this multi-step procedure is the classification of assets as either marital or non-marital (separate). The classification of assets is something which we have discussed at substantial length in the past. We have discussed, for instance, the fact that, as a general matter, all assets acquired during the marriage are presumed to be marital property, although there are important exceptions. The two most commonly referenced exceptions are inter vivos gifts and items acquired via inheritance; if a spouse acquires property either through gift or inheritance, that property is actually separate property, even though the acquisition occur during the marriage.

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As we know from our explorations of case law, complex scenarios often lead to innovative reasoning among judges. Although the law often has firm rules with respect to certain things, sometimes a set of facts demands that the firm rule be bent or altered in some way in order to produce a more equitable result.

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In the case of Sims v. Sims (2024), a trial court made an error when it presumed assets acquired after separation – but before the divorce decree – to be non-marital. In certain situations, assets acquired after separation may not be divided, but this always involves a complex analysis of the entire circumstances, something which didn’t occur by the trial court. Let’s examine this case in a bit more detail.

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Facts of the Case

The couple in this case were married for nearly 20 years. The wife requested indefinite alimony and a lump sum monetary award. The trial court awarded the wife rehabilitative alimony, rather than indefinite alimony, for three years, and a lump sum of nearly $55,000. Both spouses filed appeals, as both were dissatisfied with the final outcome.

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Importantly, the trial court considered certain assets to be non-marital which were acquired after the separation but before the divorce decree. These assets included a car and an investment plan which had been acquired by the wife. Technically, if an asset is acquired after spouses separate, but before the divorce decree, the asset is still presumed to be marital. This is true even if an asset acquired after separation ends up being counted out with respect to property distribution. In other words, the trial court made a technical error with respect to certain assets in its determination of the alimony and monetary award.

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Ruling & Discussion

Because the trial court made a substantive error with respect to property classification, the appellate division overturned the trial court’s determination and remanded the case for further proceedings.

Assets acquired after separation but before a decree can be puzzling, because these assets would “seem” to be separate property, but technically they are still classified as marital property unless an exception applies. However, as mentioned, special conditions might come up, and property acquired after separation might be seen as outside the pool of assets subject to equitable distribution. This might happen if, for instance, a given asset can be shown to be totally derived from the work or resources of the spouse acquiring that asset. But, even though such instances might happen, this doesn’t mean that courts should classify such assets as non-marital property.

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In this case, the trial court failed to properly classify the assets and therefore failed to conduct the type of analysis which would lead to a proper distribution of the marital estate. The assets acquired after separation were “automatically” taken out of the property distribution equation, and therefore improperly impacted the court’s determinations.

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Contact the Murphy Law Firm for Additional Information

Readers who want to know more about property classification, the process of equitable distribution in Maryland, assets acquired after separation, or any other related family law matter, contact one of the family law attorneys at the Murphy Law Firm today by calling 240-222-1187.

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