When it comes to property division among divorcing spouses, we can summarize the basic attitude of parties in just about every instance: people want the marital asset to be divided fairly, and they want the separate property to remain separate. Of course, this attitude is not always easy to implement. Often there is controversy regarding the classification of certain assets as either marital or separate property. In the case of Ansari v. Zuibaida (2022), for example, whether an annuity account was marital property became a major point of contention. Let’s examine this case so we can see how issues can arise when it comes to classifying assets.
Facts of the Case
In this Montgomery County case, both the husband and the wife were a bit older than average when they married. Both parties brought in substantial assets, which they accumulated before the marriage. When the couple eventually agreed to divorce, they agreed on the classification of just about every piece of property. But they disagreed about how to classify a certain annuity account.This particular account was created (and funded) by the husband, so there was no dispute as to the account’s status at the inception of the marriage (it was separate). But, during the marriage, the husband commingled the funds with other indubitably marital funds. When the court examined this situation and considered both arguments, the court ultimately believed that the commingled annuity account had become marital property.
Commingling Can Alter the Classification of an Asset
Needless to say, the husband, in this case, was not happy and quite surprised by the result. It shows us the importance of acquiring adequate counsel before going through with a divorce. If the husband had obtained competent professional assistance, he would’ve probably been able to salvage the annuity account, as it was originally separate property. The key takeaway here is that commingling can alter the classification of a certain asset. This is true even if the commingling is subtle or involves only a minor addition to the original property. For instance, a spouse owns a rental property bought before the marriage but then makes improvements using marital funds. If the couple divorces, the other spouse may have a viable argument that the rental property should be classified as marital property.Similarly, the result can be the same if a spouse has a separate savings account and commingles the account with marital funds. It may seem a bit unfair, but it illustrates the court’s preference for classifying “edge cases” as marital property.
The Burden is on the Spouse Disputing the Asset
Generally speaking, Maryland courts have a presumption against the spouse initiating a dispute whenever there is a dispute regarding the classification of an asset as marital property. In other words, if a piece of property is disputed, the court will place the burden of proof on the spouse, arguing that the property should be classified as separate. This information is important for anyone preparing to go through a divorce with a potentially disputed property.
Contact the Murphy Law Firm for More Information
If you’d like to learn more, reach out to The Murphy Law Firm today by calling 240-493-9116.