When dividing marital property in a divorce, jointly owned real estate is often the most valuable asset to divide. Even if the goal is to sell the property and share the profits, one spouse is usually left responsible for making payments for the property until it is sold.
If you are solely making payments on your co-owned property while separated or going through the divorce process, Maryland has a special credit that may apply to you.
“Crawford Credits”
In 1977, Maryland couple Robert and Alice Crawford separated. Alice remained in their jointly owned home and continued making all home-related payments during this time. When Alice sold the home a few years later, she put the net proceeds of the sale into a bank account. In 1982, Robert sued her in hopes of receiving half the bank proceeds, claiming that he was entitled to half of the proceeds because he co-owned the home.
At first, the Maryland trial court ruled in favor of Robert and considered Alice’s payments as a “gift”, and ordered that the proceeds of the sale be split equally. The case was appealed to the Maryland Court of Appeals, which held that a “gift” cannot be presumed if the couple is separated, and ordered that Robert make contributions to Alice for the payments Alice had made.
The outcome of this case has set a legal precedent today which is referred to as “Crawford Credits.” “Crawford Credits” can be requested when married co-owners of jointly titled real estate separate, and one spouse continues to pay the home expenses without any help from the other spouse. The spouse who continues to make payments without assistance from the other co-owner could be entitled to receive contributions from the non-payor spouse as part of the divorce. The contributions are for home-related expenses including the mortgage, real estate taxes, home insurance and repairs. However, it is important to know that “Crawford Credits” are not guaranteed, and rests in the sole discretion of a Judge to determine if they should be applied to a case.
The Exceptions to the Rule
The Courts recognize there are certain circumstances when these credits should not apply. Here are some exceptions to the “Crawford Credits”:
If the spouse making the payments is using a joint bank account or what is deemed as “marital funds,” the Court may not require credits to be made by the non-payor spouse. The funds are considered joint contributions by both parties.
If the spouse making the payments kicked the non-payor spouse out of the home, the Court will generally not require the non-payor spouse to make contributions to the home expenses. The act of “ousting” one spouse from the home generally forfeits the other’s right to contribution.
If the spouses came to a mutual agreement about the home and its expenses, the agreement may override a request for “Crawford Credits.”
Depending on the financial circumstances of both spouses and the outcome of the divorce, the Court could find “Crawford Credits” unfair to the non-payor spouse. For example, the non-payor spouse may earn significantly less, or they may be required to pay a significant amount of child support and/or alimony offsetting their ability to pay contributions on the home.
If both spouses are still living in the home, the Court might reject the request for “Crawford Credits.”
At Wasserman Family Law, we work with our clients to help them receive fair outcomes in their divorce. Our team can assess your situation and determine if the Crawford Credits apply to your case.
If you have questions about Crawford Credits, marital property, or divorce, please contact Laurie Wasserman at laurie@wassermanlawoffice.com or 410-842-1070. The legal team at Wasserman Family Law is here to help guide and advocate for you.
Read next:
How Marital Property is Divided in Maryland Divorce FAQ: Everything You Want to Know About Divorce or Custody Mediation in Maryland
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