Question asked on Mar 21st, 2017

Q: My wife bought a home on her own 10 months before we were married for 110,000 in oct 2013. We were married in aug 2014 My name is not on the mortgage. For the past two years she has not worked because she is a stay at home mom and depended on my income to pay the mortgage. We are now getting divorced. The house is now worth 220,000. We owe 75,000. Am I entitled to half the equity even though my names not on the house? We live in the state of Nevada. Thank you very much.

A: Unless there are some facts not disclosed, this is a classic Malmquist situation; both parties have an interest, but it is not “half”:

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As to apportionment of the house equity, the Court adopted a modified form of holding of the California Supreme Court in In re Marriage of Moore, 28 Cal.3d 366, 168 Cal. Rptr. 662, 618 P.2d 208 (1980).

Setting forth a series of detailed mathematical formulas, the community property appreciation share equals the amount by which community property mortgage payments reduced the mortgage principal, divided by the original contract purchase price of residence.  That fraction is multiplied by the total appreciation to yield the final community property share in the appreciation.  The unpaid mortgage balance is essentially credited between community and separate property according to a time rule, depending on the total number of payments made rather than the principal actually paid down in each mortgage payment.

The Court held that, normally, improvements must be separately apportioned from equity formulas, and that usually simple reimbursement without interest is the proper measure for both separate property improvements to community property, and for community property improvements to separate property.

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As you can tell, the math and legal concepts area quite complicated.  A further explanation and even worksheets for doing such calculations are posted here, but it is in your best interest to consult with a family law specialist well-versed in this subject area, because even most lawyers do not really understand how all of this works.

 

 

Marshal S. Willick