Maryland’s New Divorce Privacy Law: What Changes on October 1, 2026?
September 28, 2026
In Maryland divorce and custody cases, income is not always what it appears on a tax return or financial statement. Particularly in matters involving business owners, executives, or professionals with complex compensation structures, a critical issue often arises:
What happens when one party is earning less than they reasonably could?
Maryland courts address this through the concept of imputing income, and recent statutory changes have clarified how and when that occurs. For high-income families, understanding this evolving framework is essential.
The Updated Law: Voluntary Impoverishment Defined
Maryland law now expressly defines “voluntary impoverishment” in a child support context in Maryland Family Law § 12-201.
A person is voluntarily impoverished if they have made a free and conscious choice, not compelled by factors beyond their control, to render themselves without adequate resources. Importantly, courts no longer focus on whether someone intended to avoid support.
The question is simply whether the reduction in income was voluntary. If a court finds voluntary impoverishment, it may calculate support based on “potential income” rather than actual income.
The Statutory Factors Courts Must Consider
The updated Maryland statute and case law now require courts to evaluate a range of factors when determining whether to impute income and how much income to impute.
These include:
- Age and physical condition
- Educational level, training, and skills
- Employment and earnings history
- Efforts to obtain and retain employment
- Job opportunities in the local market
- Prevailing wage levels
- The individual’s assets and financial resources
- Actual income from all sources
- Any barriers to employment (including criminal record or other limitations)
- Any other factor affecting earning capacity
For high-income cases, these factors often require detailed financial and vocational analysis, rather than a simple comparison of past and current salary.
Common Scenarios in High-Income Divorce Cases
Business Owners and Complex Compensation
Income may be tied to:
- Ownership distributions
- Retained earnings
- Deferred compensation
- Discretionary bonuses
Courts may look beyond reported income to determine whether cash flow, perks, or retained profits reflect a higher earning capacity.
Career Changes or Reduced Work
A shift from a high-paying role to a lower-paying one may raise questions. Courts will examine:
- Whether the change was reasonable
- Timing relative to the divorce
- Whether comparable opportunities remain available
A career change is not automatically improper, but it must be credible and grounded in legitimate circumstances.
Retirement or Semi-Retirement
For high earners, retirement is frequently litigated. Courts may consider:
- Whether retirement is reasonable in light of age and health
- Financial resources available post-retirement
- Whether income reduction was strategically timed
In some cases, income may still be imputed despite retirement.
The Role of Assets in Imputing Income
In high-net-worth cases, Maryland courts do not evaluate income in isolation.
They may also consider:
- Investment portfolios
- Business ownership interests
- Real estate holdings
- Income-producing assets
A party with substantial assets may be expected to generate income from those resources. Courts may also evaluate whether asset division at the time of divorce already accounted for future income needs.
For example:
- If one spouse received significant liquid or income-producing assets, that may affect whether additional support or imputed income is appropriate
- Conversely, if alimony was intended to offset an imbalance in earning capacity, courts may be more cautious in imputing income to the recipient spouse
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How Courts Apply the Analysis
Maryland courts take a fact-specific, holistic approach. There is no formula.
Key themes in judicial decision-making include:
- Credibility of the income reduction
- Consistency with statutory factors
- The broader financial picture (income + assets)
- Fairness in light of the original divorce outcome
Notably, courts are required to address voluntary impoverishment when raised as an issue, reflecting the statute’s more structured framework.
Strategic Considerations
For the Payor Spouse
If your income has declined:
- Document the reasons carefully
- Show efforts to maintain or replace income
- Demonstrate that the change was not voluntary in the legal sense
Courts are more receptive to well-supported, good-faith changes.
For the Recipient Spouse
If you believe income is being understated:
- Analyze historical earnings and compensation structure
- Examine business records and financial disclosures
- Consider vocational or forensic experts
The goal is to present a clear, evidence-based picture of earning capacity.
Why This Matters
Imputing income can significantly affect:
- Alimony awards
- Child support obligations
- Modification proceedings
In high-income cases, even modest differences in attributed income can result in substantial long-term financial impact.
Final Thoughts
Maryland’s updated statutory framework has brought greater clarity and structure to how courts evaluate voluntary impoverishment and imputed income. But these cases remain highly fact-driven, particularly when they involve complex compensation, business ownership, or significant assets.
If questions about income, earning capacity, or support obligations are likely to arise in your case, taking the time to evaluate your situation carefully under the statutory factors can provide a clearer path forward and help position your case effectively.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as legal advice. It is always recommended to consult with a qualified attorney for personalized guidance and representation in legal matters.
About the Author
Harry A. Baumohl, Esq. is a founder of Baumohl Hamburg, LLC with more than four decades of experience practicing family law in Maryland. His practice includes complex and high-net-worth divorce, significant financial disputes, alimony, child support, and contested family law matters.
Based in Pikesville, Harry represents clients throughout Baltimore County, Howard County, and Carroll County, as well as Baltimore City, Harford County, and Anne Arundel County.
