Maryland Residential Custody Laws

23Apr

Pretty much anyone who has had to deal with residential custody issues in Maryland knows that the standard for determining a minor child’s custody is the “best interest” test, which seems to be a vague notion at first glance.  Afterall, what determines what is in the best interest of a child or children without saying more about it.  A study of Maryland case law, however, provides some guidance on this subject.

Some of the factors that are considered in deciding what is in the best interest of a child are 1) Fitness of the party seeking child custody, 2) Adaptability of the prospective custodial parent to the task of raising the child, 3) Age, sex, and health of the child (and which parent could best accommodate them), 4) Physical and moral wellbeing of the child, 5) The child’s environment, and 6) The influence likely to be exerted on the child.  Gillespie v. Gillespie, 206 Md.App. 146 (2012).  In some cases, applying the facts to these factors may result in a court order that awards sole residential custody of a child to one parent or joint residential custody to both parents.  Under the Equal Protection Clauses of Maryland and U.S. Constitutions, a court may not consider a parent’s gender as a factor in deciding the custody of a child.

The issue can become more complicated when considering some of the factors and applying the parties’ life-style to them.  For example, many clients expect that their spouse’s adultery should be a determining factor in deciding their minor child’s residential custody, particularly when the moral wellbeing of a child is a stated factor in deciding the child’s best interest.  But adultery does not become a factor if the child has not been exposed to it. Swain v. Swain 43 Md.App 622 (1979).  In other words, a child is not negatively impacted by an adultery that s/he has not been exposed to; obviously, it would be a different situation if an adulterous relationship took place in the presence of a child but that is not a common scenario, and a parent who has exposed the child to his/her adultery probably has neglected the child in many other ways that would negatively impact that parent’s request for custody.

The household where the child resides (or is expected to reside) and its adequacy play a major role in deciding the issue of child custody in Maryland.  If the parents have already separated and do not live close to each other after their separation, the parent remaining in the family home where the child resided prior to separation has an advantage because an argument can be made that staying in the marital home would bring stability to the child’s life; in many cases that would allow the child to continue to attend the same school, and maintain the child’s bonds with the his/her friends in the same neighborhood.  If you are seeking custody of your child(ren), it would not be prudent to remove yourself from the family home and relocate far from it unless the custody and visitation issues have already been decided by a valid parental agreement or as part of a separation and property settlement agreement.

It is noteworthy that trial courts are prohibited from awarding custody to a parent at a distant future, Schaefer v. Cusak, 124 Md.App 288 (1998), i.e. awarding sole residential custody to one parent but also awarding custody to be changed to joint residential custody 2 years from the trial date. A court custody order is always subject to modification and a parent can petition the court to change the custody schedule provided that there were material and/or significant change in circumstances since the court last entered a custody order that would justify modifying it.

Make sure to review our family law FAQ page for additional information regarding Maryland custody laws. Contact us for an appointment if you would like to schedule a consultation for additional information, or are seeking experienced, aggressive representation in your custody case in Maryland. www.kamkarilaw.com (301) 309-9002.

 

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Valuation of Business in Divorce Cases in Maryland

26Mar

Maryland courts undertake a three-step process to determine whether a monetary award should be granted for a property, and if so, how much. The three (3) step process is: A) Determining whether a property is marital, B) Determining the value of the property that is determined to be marital, and C) Considering the statutory factors in deciding the equitable division of martial assets and the amount of monetary award.
Determining the value of a business is the subject of many litigated divorce cases. Often the parties have their respective valuation professionals that present the court with divergent and much disputed testimony regarding the value of a marital business at their divorce trial. Under Maryland law, value is defined as fair market value, and fair market value is “the amount at which property would change hands between a willing buyer and a willing seller.” Rosenberg v. Rosenberg, 64 Md.App 487, 497A.2d 485 (1985).

The second question in determining the value of a business is how to address Goodwill. Maryland courts addressed the definition of Goodwill and distinguished it between a business asset and an individual’s good reputation. Prahinski v. Prahinski, 321 Md 227, 582 A.2d 784 (1990). The Prahinski court stated that “for professional Goodwill to be marital property, it must be a business asset having a value independent of the continued presence or reputation of any particular individual.” The court distinguished the two. First, where Goodwill is a marketable business asset distinct from the personal reputation of a particular individual, as is usually the case with many businesses, that Goodwill has an immediately discernible value as an asset of the business and may be identified as an amount reflected in a sale or transfer of a business. Second, if the Goodwill depends on the continued presence of a particular individual, such Goodwill, by definition, is not a marketable asset distinct from the individual. Personal Goodwill associated with a dentist, for example, would most likely not be considered a marital asset as the Goodwill is generally dependent on the reputation of the dentist. The Goodwill of a restaurant, on the other hand, would probably be considered a marital asset because it is independent of its owner.

It would be of no surprise, of course, that different valuation professionals would allocate a different amount for the Goodwill if it should be considered in valuation of a marital property.

Feel free to call us (301-309-9002) if you are seeking experienced, aggressive representation in your divorce and/or custody case in Maryland.

Setting Aside Separation Agreements in Maryland

22Oct

In Maryland, it is very challenging to set aside a Marital Settlement Agreement, commonly also known as a Separation Agreement or Separation and Property Settlement Agreement (hereinafter referred to as “Separation Agreement”). While there are numerous ways to attack a Maryland Separation Agreement, the likelihood of success is low, primarily because under Maryland law Separation Agreements are presumptively valid. The law presumes that every adult has the capacity to enter into a valid contract, and a Separation Agreement is considered a contract in Maryland.

The spouse attacking the Separation Agreement has the burden of proving that it should be set aside. If the Separation Agreement was obtained by fraud, duress, undue influence, or collusion, it will not be enforceable. Also, if the terms of the Separation Agreement shock the conscience of the court, the court may refuse to enforce it or may limit the application of any unconscionable terms.

To establish fraud, the attacking spouse must prove that the other spouse either concealed or misrepresented a material fact in order to induce him or her to enter into the Separation Agreement. Duress, coercion, and undue influence are proven by showing that the spouse attacking the Separation Agreement was compelled by the other spouse to do something that he or she wouldn’t otherwise have done.

If a spouse can convince the court that, due to force, threats, or coercive promises, he or she was unable to exert his or her free will with regard to consenting to the terms of the Separation Agreement, then he or she may be able to establish duress, coercion, or undue influence and have the Separation Agreement set aside. It is likely that the only evidence of these types of wrongdoing is the attacking spouse’s testimony, which probably will be contradicted by the other spouse’s testimony.

Another attack to a Maryland Separation Agreement is that its terms are unconscionable. In other words, the Separation Agreement is shockingly one-sided. For example, Maryland appellate courts have found separation agreements inequitable where one spouse received less than two percent of the total assets.

The attacking spouse also may claim incompetence or lack of capacity to contract. In a recent Maryland Court of Special Appeals case, the wife claimed she was incompetent based on her mental distress and her long history of bi-polar disorder. Ultimately, the Court found no evidence of permanent incompetence or incompetence at the time the wife signed the Separation Agreement. Because she had maintained employment, controlled her own checking account, made her own car payments, and entered into a contract to purchase real property, the Court deemed her competent to enter into the Maryland Separation Agreement.

If the attacking spouse can establish the existence of a “confidential relationship” between the spouses, then the burden shifts to the spouse who seeks enforcement of the Separation Agreement to establish its fairness and reasonableness. A confidential relationship occurs when one person reasonably expects the other to act in his or her best interests. The existence of a confidential relationship imposes a duty on the relied upon spouse to act fairly.

Establishing a confidential relationship will depend upon the facts. Some factors considered in determining whether a confidential relationship exists are age, intelligence, mental condition, education, business acumen, health, and degree of dependence on the other spouse. If the spouse who seeks to set aside the Maryland Separation Agreement is vulnerable, easily manipulated, poorly educated, unsophisticated, trusting, or in poor physical or mental health, there may be a greater likelihood of establishing a confidential relationship. There may be a greater chance that a confidential relationship exists if the attacking spouse has no (or little) familiarity with the marital assets, investments, expenses, and other financial matters.

Conversely, if the attacking spouse sought even minor changes to the Separation Agreement before it was signed, that action likely decreases the chances that a court will find the existence of a confidential relationship because that spouse demonstrated a lack of reliance on the other spouse to do what is fair by negotiating terms. If a confidential relationship is established, that merely shifts the burden to the relied upon spouse to prove the fairness and reasonableness of the Separation Agreement. No reported Maryland case has held that the existence of a confidential relationship alone is sufficient to set aside a Maryland Separation Agreement.

Furthermore, the spouse seeking to invalidate a Maryland Separation Agreement may have waived that right by accepting benefits under it. Once the spouse suspects a basis to set aside the Separation Agreement, he or she must stop accepting benefits under the Separation Agreement in order to improve the likelihood of setting it aside.

Contact our Maryland divorce lawyers (301-309-9002; ask@kamkarilaw.com) for an appointment if you are seeking experienced representation for reaching a Separation Agreement or an aggressive Maryland lawyer to represent you in your divorce case.

Divorce & Custody in Maryland When Spouses Live Together

12Oct

The Court of Appeals of Maryland decided in Ricketts v. Ricketts, 903 A2d 857, 393 Md 479 (2006) that a spouse could file and maintain a case for limited divorce and custody even if the couple live together. The Court’s decision in Ricketts stands for the proposition that withholding marital relations could be a ground for limited divorce in Maryland based on constructive desertion, and the parties do not necessarily have to live separate and apart in separate residences to obtain a divorce.  The Maryland Court of Appeals essentially reasoned that the requirement that the parties “live apart” before they can file for limited divorce based on constructive desertion should be looked in the context of marriage and it could be defined as “ceasing to live together as husband and wife.”  The Court also looked at some precedent and decided that the circuit courts have jurisdiction to decide a custody dispute between divorcing parties even if they live together.  The Court cited to the following lanaguage from Mower v. Mower, 209 Md. 413, 121 A.2d 185 (1956): Where a complaint for divorce ”also prays for custody of a minor child and for its support and maintenance, and the divorce is denied, the bill should not be dismissed but custody should be awarded and jurisdiction should be retained for the purpose of awarding support and maintenance if the circumstances should warrant such action.”

Contact our Maryland divorce lawyers for an appointment (301-309-9002; ask@kamkarilaw.com) if you are seeking experienced, aggressive representation in your divorce and/or custody case.

“Respond to every call that excites your spirit. Ignore those that make you fearful and sad, that degrade you back toward disease and death.”  RUMI