Maryland

Who Gets the Sale Proceeds in a Maryland Divorce?

Spouses split the proceeds as they agree in writing. If they disagree, the court decides. Maryland Family Law Article section 8-205 contains no 50/50 rule. The court weighs eleven factors, including contributions, economic circumstances, and the length of the marriage. Proceeds are the sale price minus the loan payoffs and the costs of sale.

By Marc Cormier

Licenses: Maryland #620443 | Virginia #0225175181 | DC #SP98365998 | Berkshire Hathaway HomeServices

27+ years in real estate. 800+ closed transactions.

Certified as a Certified Divorce Real Estate Expert (CDRE) in 2014.

Last updated: October 2, 2026

Overhead flat-lay photograph of a home sale scene

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Who decides how the proceeds are split?

You and your spouse decide, in writing. If you cannot agree, the court decides. Maryland Family Law Article section 8-205 contains no 50/50 rule.

Section 8-205(a)(1) says that after the court determines marital property and its value, it is allowed to transfer an interest in property, grant a monetary award, or both. Section 8-205(b) lists eleven factors the court considers. They include each spouse's monetary and nonmonetary contributions to the well-being of the family, the value of all property interests, each spouse's economic circumstances, the circumstances that contributed to the estrangement, the length of the marriage, ages, physical and mental condition, and how and when specific marital property was acquired. The eleventh factor is any other factor the court considers necessary to reach a fair and equitable award.

Marital property is property either spouse acquired during the marriage, however titled. Maryland Family Law Article section 8-201 defines it. It excludes property acquired before the marriage, property received by inheritance or gift from a third party, property excluded by a valid agreement, and property directly traceable to those sources.

Read that twice. Your name on the deed does not decide who gets what.

What comes off the top before anyone gets paid?

Loan payoffs and the costs of sale come off the top. What is left is the net, and the net is what you split.

Net proceeds are the sale price minus the loan payoff and the closing costs. Repairs and staging also come out of the net if you agree they do. Here is the order:

Sale price
Minus the payoff on the first mortgage
Minus the payoff on any second mortgage or home equity line
Minus the agent commission, which is negotiable and set in your listing agreement
Minus seller closing costs
Minus agreed repairs and staging
Equals the net you split

Count every loan on the house before you agree to a split. Ask your title company for the full list of payoffs and for any lien that shows up. Ask for the payoff letter from each lender. The payoff is not the statement balance, because interest accrues and fees apply.

What does a split look like in dollars?

Put the numbers on paper before you argue about percentages. Made-up numbers.

Line	Amount
Sale price	$750,000
Mortgage payoff	minus $300,000
Agent commission (6% of $750,000)	minus $45,000
Closing costs	minus $8,000
Repairs and staging	minus $14,000
Net before tax	$383,000

Check the math: $750,000 minus $300,000 is $450,000. Minus $45,000 is $405,000. Minus $8,000 is $397,000. Minus $14,000 is $383,000. The 6% commission is an example rate. Commission is negotiable.

Now compare three splits of the same $383,000. None of these is a legal rule. Each one is a made-up agreement.

Split	Spouse A	Spouse B
50/50	$191,500	$191,500
55/45	$210,650	$172,350
60/40	$229,800	$153,200

Check the math: 55% of $383,000 is $210,650. 45% is $172,350. Together they equal $383,000. 60% is $229,800. 40% is $153,200. Together they equal $383,000.

The gap between a 50/50 split and a 60/40 split is $38,300 for each spouse. That is real money. It is also the reason to read section 8-205 before you assume "half."

Proceeds are not the same as taxable gain. Your gain depends on what you paid for the house and what you spent on it. IRS Topic no. 701 says you exclude up to $250,000 of gain from your income, or up to $500,000 if you file a joint return with your spouse. You must have owned the home at least 24 months of the last 5 years. On a joint return, one spouse must meet the ownership test and both must meet the use test. Ask your tax professional how this applies to you.

Does the split change if one spouse paid more?

It changes only if your written agreement or a court order says so. Without that paper, every payment becomes an argument at the closing table.

Maryland Family Law Article section 8-208(c) lets the court order either or both spouses to pay the mortgage or rent, related indebtedness, maintenance, insurance, assessments, taxes, or similar expenses. The statute does not say who is repaid from the sale proceeds. Your agreement says that.

Suppose Spouse A pays $3,500 a month in carrying costs for four months. That is $14,000. Suppose the agreement says Spouse B repays half, and the repayment comes out of Spouse B's share.

Line	Spouse A	Spouse B
Even split of $383,000	$191,500	$191,500
Repayment of half of $14,000	plus $7,000	minus $7,000
Final share	$198,500	$184,500

Check the math: half of $14,000 is $7,000. $191,500 plus $7,000 is $198,500. $191,500 minus $7,000 is $184,500. Together they equal $383,000.

Write the repayment rule before you list. Name the costs that count, the start date, and the proof each spouse provides. Ask your attorney to word it.

What do you settle before the closing date?

Settle six items in writing before the house hits the market.

The split. A percentage, a dollar figure, or a formula.
The costs that come off the top, and who approves each one.
Repayment of carrying costs, with a start date and proof required.
Who holds the proceeds and when each spouse receives them. Ask your title company and your attorney.
Who pays any bill that is not settled at closing.
What happens if the price drops. Name the price floor now.

Each spouse needs their own attorney. I am a REALTOR®. I do not give legal or tax advice, and I do not recommend one attorney over another.

WHAT THIS MEANS FOR YOUR HOUSE

You set the split in writing, or the court sets it. Maryland has no 50/50 rule.
The net is what you split. Run the net sheet before you talk about percentages.
Count every loan on the house. Ask your title company for the full payoff list.
Write the repayment rule for carrying costs before you list.
Ask your tax professional before you sign anything.

Where this goes wrong

I have seen this mistake before. Two spouses agree to "split it down the middle" before anyone prices the sale. Then the repairs run over, a second loan shows up, and one spouse says the other owes for four months of mortgage payments. Nothing is in writing. The closing turns into a fight.

Assuming 50/50 is the law. Section 8-205 lists factors and contains no even-split rule.
Splitting the price instead of the net. The price is not what you walk away with.
Missing a loan. A second mortgage or a home equity line cuts your share.
Skipping the repayment rule. $14,000 of carrying costs is $7,000 in dispute.
Agreeing on a percentage before you see the net sheet. Emotion costs people money.
Leaving the closing date open. Delay usually makes the problem worse.

This is where people usually get hurt. They argue about the percentage and never check what is left to split.

Local note for Montgomery County: The Montgomery County Circuit Court runs a Family Law Self-Help Center. It is a free walk-in clinic staffed by attorneys, in the South Tower, First Floor, Room 1500. It gives general legal information or limited legal advice on divorce, custody, and related matters. You still pay case fees and costs. Source: https://www.montgomerycountymd.gov/circuit-court/services/family-law-self-help-center

Questions about sale proceeds in a Maryland divorce

How are proceeds split at closing?

Net proceeds are the sale price minus the loan payoff and the closing costs. The split follows what you and your spouse agree in writing or what a court orders. Maryland Family Law section 8-205 contains no 50/50 rule. Ask your title company and your attorney who holds the money and when each spouse receives it.

Is Maryland a 50/50 state?

No. Family Law Article section 8-205 contains no 50/50 rule. The court weighs eleven factors, including each spouse's contributions, the value of all property interests, economic circumstances, how long the marriage lasted, ages, physical and mental condition, and how and when the property was acquired. Spouses who agree set their own split in writing.

Does one spouse get more than half of the proceeds?

Possibly. Spouses who agree set their own split in writing. If they disagree, the court weighs the eleven factors in Family Law Article section 8-205(b) and is allowed to grant a monetary award. The statute contains no even-split rule. Ask your attorney how the factors apply to your case.

Who pays for repairs and staging?

Your written agreement decides. Set a dollar cap on repairs and staging before you list, and name who approves spending. Say whether the spouse who pays is repaid from the proceeds. Without a written term, every invoice becomes a negotiation. Repairs and staging come out of the net before the split. Ask your attorney to word the rule.

Who pays the closing costs?

Seller closing costs come out of the sale proceeds. Net proceeds are the sale price minus the loan payoff and the closing costs. In a made-up example, commission and closing costs at 10% of $750,000 equal $75,000. Ask your title company for every other figure, including any Maryland transfer or recordation tax. Your agreement says how the spouses share the cost.

What is a payoff letter?

A payoff letter is a written statement from the lender that shows the exact amount needed to pay off the loan on a stated date. It differs from the statement balance because interest accrues and fees apply. Example: $250,000 balance plus $1,050 interest plus $150 late fee equals $251,200.

Do we pay capital gains tax when we sell?

Only on gain above your exclusion. Under IRS Topic no. 701, you exclude up to $250,000 of gain, or up to $500,000 on a joint return with your spouse, if you meet the ownership and use tests. Your CPA confirms your case. State tax and Maryland transfer and recordation taxes are separate questions for your title company.

Do you need a divorce attorney?

You should have your own. I am a real estate agent. I do not give legal advice, and I do not work for one spouse against the other.

I am not affiliated with any law firm. I do not recommend one attorney over another. Your spouse needs their own attorney, not yours.

If you need to find one, start with the bar association referral services:

Links open in a new tab.

What an attorney handles	What I handle
Who gets the house and the money	The value of the house
The marital settlement agreement	The net sheet
Court orders that affect the sale	Listing, showings, offers, and closing
Custody, support, and everything outside real estate	A written record of every showing and decision

General information only. Not legal, tax, or financial advice. The referral services are independent of me. I do not guarantee any attorney's work or results.

About the Author

Marc Cormier