## Facts

- Husband and wife married in 1977 and later divorced in Maryland.
- During the marriage, husband worked for insurance companies under agency manager agreements that generated commissions on policies he sold and profit shares from policies written by agents he supervised (“office codes”).
- The agreements provided husband a proportional share of agency profits from renewals “if and when” policies renewed and stated that this share was vested and could pass to heirs upon death.
- In the divorce action, the trial court classified husband’s interest in future renewal commissions on policies sold during the marriage as marital property.
- The court accepted expert testimony valuing the present discounted profit value of those renewal commissions at $410,000.
- Husband had received $267,000 in company “advances,” treated as loans repayable on demand and chargeable against renewal commissions.
- The trial court did not treat the advances as a marital debt reducing the asset dollar-for-dollar; it treated the indebtedness as an economic circumstance and awarded wife $200,000 as a monetary award.
- Husband appealed the classification of renewal commissions as marital property and the treatment of the advances.

## Issues

1. Whether anticipated renewal commissions on insurance policies sold during the marriage but payable after divorce constitute “marital property” as property acquired during the marriage.
2. Whether insurer “advances” chargeable against renewal commissions must be treated as marital debt offsetting the marital asset’s value, or may instead be considered in assessing the parties’ economic circumstances when setting a monetary award.

## Decision

- The Maryland high court affirmed.
- The court held that the contractual right to renewal commissions tied to policies sold during the marriage was marital property, even though payments would occur after divorce and depended on future renewals.
- The court upheld the trial court’s valuation approach based on expert persistency-rate evidence and present-value discounting limited to marriage-period policy sales.
- The court held the trial judge did not err by considering the $267,000 advances as part of the parties’ economic circumstances rather than automatically subtracting them from the marital asset valuation.
- The $200,000 monetary award to the wife was affirmed.

## Legal Principles

- A property interest is “acquired during the marriage” when the enforceable right is obtained during the marriage, even if payments are deferred until after divorce.
- A vested contractual right to contingent future income may be marital property; contingency affects valuation, not classification, when the right is legally enforceable.
- Reasonable valuation of contingent future income may rest on evidence-based projections (e.g., industry persistency rates) and present-value discounting.
- Post-divorce efforts or conditions affecting ultimate receipt do not necessarily convert a vested, marriage-acquired right into nonmarital property; such factors may be handled through valuation and equitable monetary-award considerations.
- In setting a monetary award, courts may account for liabilities and repayment obligations as part of the parties’ economic circumstances rather than requiring a mandatory dollar-for-dollar offset at the valuation stage.

## Conclusion

Maryland treated an insurance agent’s vested contractual rights to renewal-commission profits attributable to policies sold during the marriage as marital property despite post-divorce payment and contingencies, and approved addressing related advances as an economic circumstance when determining an equitable monetary award.


Niroo v. Niroo, 545 A.2d 35 (Md. 1988)