Is this true in CA?

[bur1946nett]

What is the name of your state? CA

Is this true in California?:

Generally, if one spouse keeps the home and is fully responsible for the mortgages and ordinary maintenance, then the other spouse's share of the equity/appreciation in the home is frozen at the level its at when the separation occurs.
Need to know this for negotiations...

[I AM ALWAYS LIABLE]

Originally Posted by bur1946nett

What is the name of your state? CA

Is this true in California?:

Generally, if one spouse keeps the home and is fully responsible for the mortgages and ordinary maintenance, then the other spouse's share of the equity/appreciation in the home is frozen at the level its at when the separation occurs.
Need to know this for negotiations...

My response:

What was the date of the marriage?

What was the date of the home purchase?

Who paid the down payment - - you, him, or both of you?

What was the date of separation?

What was the date of dissolution, if any?

Were there any contributions to the home purchase; i.e., mortgage payments, made by the spouse who was not living in the home, but after the date of separation?

We'll start with these questions. But, let me warn you - - the above statement is "general" in nature, and not necessarily the "rule of law", which depends on your actual situation.

IAAL

[bur1946nett]

Originally Posted by I AM ALWAYS LIABLE

My response:

What was the date of the marriage?

What was the date of the home purchase?

Who paid the down payment - - you, him, or both of you?

What was the date of separation?

What was the date of dissolution, if any?

Were there any contributions to the home purchase; i.e., mortgage payments, made by the spouse who was not living in the home, but after the date of separation?

We'll start with these questions. But, let me warn you - - the above statement is "general" in nature, and not necessarily the "rule of law", which depends on your actual situation.

IAAL

Okay, understood

The date of the marriage was July 27, 1994.
The date of the home purchase was April 27, 1992.
I paid all of the $40,000 down payment out of my personal funds (we were not married at the time).
The date of separation was mid February, 2000.
And once she left, she made no further contribution to the home in any type of payments or reimbursements, but we did continue to file taxes jointly as married couple and she reaped the benefits of half the tax refunds.

Thanks for any help you may be able to provide.

[I AM ALWAYS LIABLE]

Originally Posted by bur1946nett

Okay, understood

The date of the marriage was July 27, 1994.
The date of the home purchase was April 27, 1992.
I paid all of the $40,000 down payment out of my personal funds (we were not married at the time).
The date of separation was mid February, 2000.
And once she left, she made no further contribution to the home in any type of payments or reimbursements, but we did continue to file taxes jointly as married couple and she reaped the benefits of half the tax refunds.

Thanks for any help you may be able to provide.

My response:

Okay, basically, since she still has an interest in the home because it's an "ongoing, appreciating, asset," the division of that asset takes place on the date the Decree is signed - - i.e., "trial date evaluation" as opposed to "separation date evaluation." The date of trial normally controls valuation of the CP interest if the rights are awarded exclusively to one spouse, with an equalizing (cash-out) award to the other spouse. But this simply means value is fixed at the trial date: The determination must reflect value as of the date of separation (when the community's percentage ownership became fixed) plus accruals thereon as of the date of trial; new contributions to the "principal" amount after the date of separation are your separate property and do not become part of the Community Property valuation. [See Marriage of Behrens (1982) 137 Cal.App.3d 562, 57]

You will, however, be able to regain your separate down payment from the division; i.e., your half will be determined by a valuation that will be made on the date of trial, then add back your sole payments since separation, then add back your down payment. Then, she's entitled to half of what is left over.

Modified Moore/Marsden apportionment formula:

In this scenario, the community's pro tanto interest must be calculated by applying a modified version of the standard Moore/Marsden formula:

• First, the separate property estate must be credited with the equity appreciation (by adding it to the initial acquisition cost) that occurred both before the community-funded improvements began and after the date of separation.

• The community's contributions to equity include only the community-funded capital improvements and only to the extent those improvements increased the property's value.

• Once the amount of the CP investment is determined, the community's interest is calculated as "the ratio of the community investment to the total separate and community investment in the property." Expressed as a percentage, that ratio is then multiplied by the appreciation in the property's value during marriage and before separation. The nonowner spouse is then entitled to one-half the resulting amount as his or her CP share.
Ratio

Total Investment:

$ 12,500 purchase price

+ $ 37,500 preimprovement

appreciation + $ 77,500

community improvements

= $127,500 total investment


Separate Property:

$ 12,500 purchase price

+ $ 37,500 preimprovement appreciation

= $ 50,000 total SP investment


Ratio of H's SP interest: $50,000/$127,500 = 39.22%

Ratio of CP interest: $77,500/$127,500 = 60.78%


Appreciation in Equity

Equity at separation date: $450,000

Less equity at date of
improvements - $ 50,000

Equals appreciation
during marriage = $400,000 DPAC3 Value of W's CP Interest

CP interest is 60.78% of $400,000 equity

appreciation during marriage: $243,120

W gets one-half: $121,560

Value of H's SP & CP Interest

39.22% of $400,000 equity appreciation during

marriage ($156,880), plus one-half of CP interest

in equity appreciation ($121,560), plus $12,500

purchase price, plus $37,500 preimprovement

appreciation = $328,440

The above facts are taken from Marriage of Marsden (1982) 130 Cal.App.3d 426, 181 Cal.Rptr. 910.


Another example:
At time of the purchase, the home is clearly H's separate property (SP title, SP down payment, and loan based on SP). However, if community funds are used to make mortgage payments on property purchased by one spouse before marriage, the community acquires a pro tanto interest in the ratio that principal payments on the purchase price made with CP bear to payments made with SP . . . and any increase in value of the property must be apportioned accordingly. [Marriage of Moore (1980) 28 Cal.3d 366, 168 Cal.Rptr. 662; Marriage of Marsden, supra; Marriage of Frick, supra; see Bono v. Clark (2002) 103 Cal.App.4th 1409, 1421-1422, 128 Cal.Rptr.2d 31, 39]

Source of payments issues:
Of course, the party who purchased the house before marriage might be able to overcome CP apportionment by proving the payments during marriage did not come from a CP source. But if the payments were made from a commingled account (and they often are), they are presumed CP unless the contestant can satisfy the "tracing" burden. [See Marriage of Higinbotham (1988) 203 Cal.App.3d 322, 328-329, 249 Cal.Rptr. 798, 800]

General apportionment formula:
The calculation of interests must take into account the character of the downpayment and the character of the loan payments toward principal; amounts paid for interest, taxes and insurance are disregarded, since that portion of the mortgage payments "does not contribute to the capital investment." [Marriage of Moore, supra, 28 Cal.3d at 372, 168 Cal.Rptr. at 664; Marriage of Marsden, supra, 130 Cal.App.3d at 438, 181 Cal.Rptr. at 916; see also Marriage of Wolfe (2001) 91 Cal.App.4th 962, 973, 110 Cal.Rptr.2d 921, 929--error to order H to reimburse community for half CP funds used to pay property taxes on his SP realty]

Thus, the SP percentage interest is determined by crediting separate property with the downpayment and the full amount of the loan, less the amount by which CP payments reduced the principal balance of the loan, and dividing that sum by the purchase price. [Marriage of Moore, supra, 28 Cal.3d at 373, 168 Cal.Rptr. at 665; Marriage of Frick, supra, 181 Cal.App.3d at 1008, 226 Cal.Rptr. at 770]

The CP percentage interest is ascertained by dividing CP payments in reduction of principal by the purchase price. [Marriage of Moore, supra, 28 Cal.3d at 373-374, 168 Cal.Rptr. at 665; Marriage of Frick, supra, 181 Cal.App.3d at 1008, 226 Cal.Rptr. at 770]

(See next)

[I AM ALWAYS LIABLE]

Example:
The percentages are used to determine the respective SP vs. CP interests in the appreciation accrued after date of marriage and before trial. [Marriage of Marsden, supra]

Adjustment to determine actual cash shares:
The calculation of percentage interests is based on the original purchase price, not on the property's fair market value at date of marriage--i.e., the premarital appreciation is not factored in to determine the respective percentage interests. [Marriage of Marsden, supra; Marriage of Frick, supra, 181 Cal.App.3d at 1009, 226 Cal.Rptr. at 771]

By the same token, where premarital separate property (not converted into joint form during marriage) has substantially increased in value at time of marriage, a substantial inequity could result if the community were to share in the premarital appreciation. In this case, therefore, the separate property interest is to be credited with the premarital appreciation to determine actual cash shares. [Marriage of Marsden, supra, 130 Cal.App.3d at 438-439, 181 Cal.Rptr. at 916-917; Marriage of Frick, supra, 181 Cal.App.3d at 1009, 226 Cal.Rptr. at 771]

Example:
In Marsden, supra, H's SP cash share reflected all of the premarital appreciation, plus 75.98% of the post-date-of-marriage appreciation; and the community shared only in 24.02% of the post-date-of-marriage appreciation.

Same analysis where home acquired before marriage--separate property title, mortgage refinanced during marriage:
The same Moore/Marsden apportionment approach applies where there is a premarital loan secured by a party's separate property and, instead of making payments during marriage on the original mortgage with community funds, the property is refinanced during marriage and the original mortgage is paid in full with proceeds of a community property loan obtained jointly by the parties. The community is entitled to an interest in the property pursuant to Moore/Marsden since it is treated as having contributed toward the property's acquisition. [Marriage of Branco (1996) 47 Cal.App.4th 1621, 1627, 55 Cal.Rptr.2d 493, 496--community entitled to interest in W's premarital residence where H and W procured loan secured by the residence 10 months after marriage which paid off entire balance on original mortgage]
"We can discern no meaningful difference, for purposes of determining whether the community acquires an interest in real property, between the use of community funds to make payments on one spouse's preexisting loan and the use of proceeds from a community property loan to pay off the preexisting separate loan." [Marriage of Branco, supra, 47 Cal.App.4th at 1627, 55 Cal.Rptr.2d at 496]

Calculation of interests; example:
Assume, as in Branco, supra, that W owned the residence before marriage. Almost a year into the marriage, H and W refinanced the home using a portion of the community loan proceeds to pay off the original mortgage.

In this scenario, the community property interest in the home is computed by dividing the community's contribution to the purchase price of the home (i.e., payments reducing principal made with CP funds on the original loan, if any, plus the principal balance of the loan paid off with the proceeds of the community loan) by the purchase price.

This percentage is then multiplied by the appreciation of the home during marriage. H is entitled to one half this amount as his share of the community interest. W is entitled to the other half of the community interest in the appreciation during marriage, plus all the premarital and postseparation appreciation, the downpayment and payments reducing principal on the original loan made before marriage. [Marriage of Branco, supra, 47 Cal.App.4th at 1629, 55 Cal.Rptr.2d at 497]

(H and W then share equally the outstanding loan balance on the secured loan obtained during marriage as it is a community obligation. Marriage of Branco, supra, 47 Cal.App.4th at 1629, 55 Cal.Rptr.2d at 497-498)


Good luck to you.

IAAL

[rmet4nzkx]

Originally Posted by I AM ALWAYS LIABLE

My response:

What was the date of the marriage?

What was the date of the home purchase?

Who paid the down payment - - you, him, or both of you?

What was the date of separation?

What was the date of dissolution, if any?

Were there any contributions to the home purchase; i.e., mortgage payments, made by the spouse who was not living in the home, but after the date of separation?

We'll start with these questions. But, let me warn you - - the above statement is "general" in nature, and not necessarily the "rule of law", which depends on your actual situation.

IAAL

OP asked this question on 10-19 and here is an answer he got.
[url]http://forum.freeadvice.com/showthread.php?t=283875[/url]

Originally Posted by LdiJ

If you co-owned the house prior to getting married, then whether or not its community property is almost irrelevant. Even if its separate property, you CO-OWN it, therefore each of you owns half of the house as separate property, or half of the house as community property...either way its owned jointly.

Have fun.