How much equity is wife entitled to...

[calidude]

What is the name of your state? CA

I'm trying to settle our divorce after a marriage of 18 years (filed by wife) out of court (no minor children). My wife prepared a community property declaration which was way out of line (pulling numbers out of thin air). While I was preparing a more realistic declaration for her review (supported by facts where applicable) as well as to provide a base for a settlement, I kept wondering if she is entitled to a 50/50 equity split of our home. Here's why:

04/01/98 Lease of the house.

04/01/03 I bought the home as my sole and seperate property via quit claim deed (her bad credit history). Appraised value: 112k

07/06/06 Refinanced home as joint tennants via quit claim from myself to both of us. Appraised value: 235k

01/08/07 Wife left the home.

07/10/07 Wife filed for divorce.

As you can see, I owned the home as my sole and seperate property up through 07/06/06 when the house was appraised at 235k via quit claim deed. As a community property state, I had assumed she would be entitled to 50% of the equity until I found this reference, "in RE Marriage Of Mathews", which addresses the quit claim issue.

So, my question is...is the wife legally entitled to 50% of the entire equity after being on the title for six months, or is she entitled to 50% of the equity above and over 235k?

I would appreciate any input with regard to this issue. Thanks, calidude.What is the name of your state?

 

[Ohiogal]

Yes she would be entitled to 50% of the equity that accrued during the marriage.

 

[calidude]

Ohiogal,
Thank you very much for your reply. I was wondering if you would please elaborate further regarding your answer.

The reason I'm still confused is because of the way I'm interpretating the "Marriage of Mathews" ruling. The way I am understanding it is that even though we bought the house during our marriage, she, in effect, released all interest in the house by signing a quit claim deed. Then, when I refinanced, I therefore brought the house into the marriage as community property on July 6, 2006.

So, my confusion is whether she is entitled to the equity starting when the house was my sole and seperate property dating back to when the house was purchased, or when the house was brought into the marriage.

I wonder if my interpretation of the ruling is wrong. I'm assuming you're familiar with the case I'm referring to, but if not, I can post a couple of links to the ruling if need be. Just let me know and I'll be happy to post them.

Again, thanks so much for your thoughts regarding this issue. I appreciate it very much.

Thanks again, calidude.

 

[nextwife]

Is she on title?

 

[calidude]

Yes, I put her on the title when I refinanced on 7/6/06, 6 months before she left the house.

 

[nextwife]

If she is an owner, she owns the interest to which she holds title.

 

[calidude]

Wow, thanks for the fast reply. So, what you are saying is she is entitled to all equity from 4/1/03 even though she didn't have legal interest until 7/6/06? Thanks again for your reply.

 

[nextwife]

You made her a half owner. That was a choice you made - to put her in title. If I pay zip for a diamond that you GIVE me, it's still mine because I now own it. What I paid toward it is irrelevant once I am the OWNER.

She now owns the interest to which she holds title. You may be able to argue that your property settlement adjust to reflect her contribution, but that may not fly. She is now OWNER in title of a 50% undivided interest.

 

[calidude]

Thanks, you make a very good and clear point. One more question if you don't mind for future reference. If I decide to remarry in the future and have a house in my own name again, basically I must leave my new hypothetical wife off the house indefinately or I would be "giving" her 50% equity of any appreciation regardless of what the house is worth at the time she is placed on the title?

Again, I appreciate you taking the time to help clear up my confusion. You guys/gals are great! calidude.

 

[calidude]

Nextwife,
After re-reading my last post I realized that I was out of line and I would like to apologize. I just seem to over-analyze things no matter what the issue is. I guess I'm a little too inquisitive by nature so I end up beating things up sometimes. I really do appreciate the feedback I receive from anyone willing to help. Thanks again to all, calidude.

 

[LdiJ]

Nextwife,
After re-reading my last post I realized that I was out of line and I would like to apologize. I just seem to over-analyze things no matter what the issue is. I guess I'm a little too inquisitive by nature so I end up beating things up sometimes. I really do appreciate the feedback I receive from anyone willing to help. Thanks again to all, calidude.

I am not sure why you think that you were out of line....I don't see that you were.

The bottom line is that as of today, she is 1/2 owner of the home which entitles her to 50% of the equity. The past is irrelevant because she is on the deed.

 

[calidude]

Thanks Ldij,
In hindsight, I wish I had known, lol. Oh well.

Thanks again everyone for your help. Much appreciated, I think, hehe. calidude.

 

[Ohiogal]

A quit claim only quit claims the interest she had at the time anyway -- she only had a small interest in the down payment at the time of the quit claim. She accrued more interest (marital) as she went along in the marriage so even if you had not gifted her with equity she was still entitled to some equity.

 

[calidude]

Ohiogal,
Thanks once again for your reply. I realize I should consult with an attorney regarding this matter, but understanding this would assist me in preparing questions beforehand. I'm interested in what you have to say, however, I don't want to run the risk of beating this issue to death here. I'm interested in learning what changed (if anything) and when with regard to what I did during my refinance. I'd like to take a different approach to this and, if you're interested, another venue other than this forum. My email is [email protected]. If not, I'll completely understand. Again, I appreciate the help received from all. calidude.

 

[CJane]

It is my understanding that it would make NO difference at all whether her name was on the house or not. Even if you had purchased the house free and clear BEFORE you were married, she would be entitled to 1/2 of any increase in value/equity during the marriage.

The only way to avoid that would be to somehow get your spouse to sign a quit claim right before you filed for divorce.