Is this Community Property

[ls75075]

What is the name of your state (only U.S. law)? Texas

We both owned homes before we were married and I sold my house and we lived in his but he agreed as part of the condition of me selling the house that the other house would be community property but he never changed the deed because we were going to buy a house together but five years later we are getting divorced and never sold his. He made me this promise openly and many people heard him say it Is this community property?

 

[LdiJ]

What is the name of your state (only U.S. law)? Texas

We both owned homes before we were married and I sold my house and we lived in his but he agreed as part of the condition of me selling the house that the other house would be community property but he never changed the deed because we were going to buy a house together but five years later we are getting divorced and never sold his. He made me this promise openly and many people heard him say it Is this community property?

What did you do with the money that you got from the sale of YOUR home?

 

[mistoffolees]

What is the name of your state (only U.S. law)? Texas

We both owned homes before we were married and I sold my house and we lived in his but he agreed as part of the condition of me selling the house that the other house would be community property but he never changed the deed because we were going to buy a house together but five years later we are getting divorced and never sold his. He made me this promise openly and many people heard him say it Is this community property?

Verbal agreements have no bearing on real estate transactions. If it's not in writing, it doesn't exist.

The rules for community property in TX are here:
Property Division

If you can show that some of your money went into the purchase of the house, then it may be community property. Even if it didn't if any marital funds were used for upkeep, taxes, mortgage payments, etc, then you will be entitled to 1/2 the appreciation in the home equity while you were married. However, this may or may not be significant over a 5 year marriage given the current home price values. If the home price has gone down, then even if you're paying off the loan balance with marital funds, the available equity may not have gone up much, if any at all.

 

[ls75075]

What did you do with the money that you got from the sale of YOUR home?

It was deposited into a joint account and really isn't traceable Would I be entitled to that amount? We did more than just pay the regular mortgage payment we paid over and above the normal payment

 

[mistoffolees]

It was deposited into a joint account and really isn't traceable Would I be entitled to that amount? We did more than just pay the regular mortgage payment we paid over and above the normal payment

Once you deposit your money into a joint account, it is generally marital property. In some cases, it can be possible to trace it, but that's hard and there are lots of exceptions.

If you paid the mortgage from marital funds (or from the joint account you paid into), then any INCREASE in home equity would be marital and you would be entitled to half of that.

 

[ls75075]

I'm confused about the definition of Home Equity so for example:

If the house (these are not real numbers) was worth $160,000 and the debt at the time of marriage was $100,000 than would the net equity at the time of marriage be $60,000.

If at the time of divorce the house was worth $175,000 and the debt was now $75,000 so the net value would be 100,000.

So my question is the home equity change the following:

Beginning Ending Change
Value 160,000 175,000 15,000
Debt 100,000 75,000 25,000
Equity 60,000 100,000 40,000

My question is the $15,000 the community portion or the $40,000? Also do you deduct a percentage for possible costs of selling from the 15,000 or the 40,000?

Thanks

 

[LdiJ]

I'm confused about the definition of Home Equity so for example:

If the house (these are not real numbers) was worth $160,000 and the debt at the time of marriage was $100,000 than would the net equity at the time of marriage be $60,000.

If at the time of divorce the house was worth $175,000 and the debt was now $75,000 so the net value would be 100,000.

So my question is the home equity change the following:

Beginning Ending Change
Value 160,000 175,000 15,000
Debt 100,000 75,000 25,000
Equity 60,000 100,000 40,000

My question is the $15,000 the community portion or the $40,000? Also do you deduct a percentage for possible costs of selling from the 15,000 or the 40,000?

Thanks

Its the 40k....and yes, the selling costs would come out of that if the home is sold to come up with your share of the equity. However, your ex wouldn't necessarily have to sell to do that.

Its really too bad that you deposited the money from the sale of your home into a joint account. If you had kept it in a separate account, it would have been your separate property.