Asset division is not just about “assets.” It’s also about debts. In extreme cases, where a couple is underwater with a massive amount of debt, the property division process could be more about dividing debt than actual assets.
Aside from the love and religious aspects of marriage, entering into marriage is very much a financial agreement in which two people agree to join their finances. While couples will maintain certain personal assets and debts that will not be considered a part of the marital estate or subjected to the property division process, for the most part, debts and assets accrued after the date of marriage will usually be divided between the spouses upon divorce.
Imagine this scenario: You’re conservative with your money, but your spouse is not. He or she has $100,000 in college loans when you get married. Since your spouse had this debt prior to marriage, you might not be required to split it during divorce.
Here’s another scenario: Your spouse takes out a $200,000 loan to start a new business venture after you say “I do.” Much of that debt still exists. In your asset division proceedings, while you will likely be able to lay claim to part ownership of the business that the $200,000 loan created, what is left of that original debt will reduce any value that business maintains.
In order to get a better understanding of how you and your spouse’s debt will be divided in your divorce process, you may want to consult with an experienced Maryland asset division lawyer.
Source: Women’s Institute for Financial Education, “In Sickness, Health…and Debt? Are You Responsible for Your Spouse’s Debts?,” Ginita Wall, CPA, CFP, accessed Aug. 18, 2017