Property Settlement

What is the name of your state?What is the name of your state? I live in Minnesota.
Before we got married, we saw a house that we liked. I paid $1000. earnest money from my checking account. Several months later, the sellers were panicking because we couldn't get a mortgage. She deposited $5000. into my account and I wrote another check for $4000. to the sellers to hold the house ( BTW, she was on AFDC at that time, and I dunno where she got that money). We went to my parents and they gave us a mortgage for the entire purchase price of the house. We used $3K of the excess money for appliances ( which she took) and the rest went into a joint account when we married a few months later.
She is now claiming that she is entitled to half the increased value of the house, because she "invested" $5000. in it. I contend that she is entitled to half the equity in the house at the time of the divorce, because my parents lent us the entire purchase price
My mother has stated that she will be forgiving the mortgage in her will, but I consider that to be a non-marital asset.
Comments??? Advice????

Since your mom is still with us, that's not an issue. Even if she had passed on already, if the money is left to you then it is not considered marital property (inheritances are exempt). HOWEVER, this is not your situation.

You are married, this is your marital home, and as of this moment it doesn't matter who got what or put money into which from where.... your soon-to-be ex is correct. Sorry to tell you. You don't owe her the value of the home, but you will have to pay her 1/2 the appreciated value. (For those who don't understand: if the couple purchases the home at 100,000 and it is now worth 120,000, each member of the couple is entitled to 10,000 in profit) The downer is that if you refuse to do this, you may end up owing her 1/2 the appreciated value later down the road when you decide to sell the home. Then you could be out a whole lot more. So, my thought is get a little home equity loan... just enough to cover her request (though I'd get more appraisals - atleast 2 or 3 to find the low-end value). Then cut her loose.

The good side is that your mom's promise to forgive the whole debt eventually (a promise from her to you only) does not translate to a winfall for the stb ex.

*I am not an attorney, btw. But in my own divorce I've had to look so much up that I am learning more than I'd like to admit. Sadly, I still have one issue out there of my own to hash out.

Best of luck, anyway.