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Home Valuation

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Sirdouglasb12

Junior Member
What is the name of your state (only U.S. law)? MN

I owned my home prior to my marriage. I have been married for less than 5 years. We are now going through a divorce. If I understand correctly, my wife is entitled to 1/2 of the *Appreciation* of the house in the time we were together. With the housing market slump though, my house is worth thousands of dollars less now (and therefore less equity) than when we were first married.

Since the house has gone down in value and it was a premarital asset, does she have any right to the house? If the valuation has gone down during our marriage, is that counted like a bill or liability?

Thank you!
 


LdiJ

Senior Member
What is the name of your state (only U.S. law)? MN

I owned my home prior to my marriage. I have been married for less than 5 years. We are now going through a divorce. If I understand correctly, my wife is entitled to 1/2 of the *Appreciation* of the house in the time we were together. With the housing market slump though, my house is worth thousands of dollars less now (and therefore less equity) than when we were first married.

Since the house has gone down in value and it was a premarital asset, does she have any right to the house? If the valuation has gone down during our marriage, is that counted like a bill or liability?

Thank you!
Its not just the appreciation, its also the amount of equity gained through paying down the mortgage as well.

However, if your house has less equity now than when it did when you were married (appreciation and equity gained through paying down the mortgage) then there would be no marital equity. The value going down would NOT count like a bill or liability.

A really clever attorney might try to make an argument separating the appreciation/depreciation from the equity gained through the mortgage pay down, but I don't think that would go very far.
 

Ronin

Member
Its not just the appreciation, its also the amount of equity gained through paying down the mortgage as well.

However, if your house has less equity now than when it did when you were married (appreciation and equity gained through paying down the mortgage) then there would be no marital equity. The value going down would NOT count like a bill or liability.

A really clever attorney might try to make an argument separating the appreciation/depreciation from the equity gained through the mortgage pay down, but I don't think that would go very far.
Conversely, if the home did appreciate, does this mean that a divorcing spouse should claim as equity half the amount of appreciation AND half the mortgage paydown during the marriage?
 
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nextwife

Senior Member
Conversely, if the home did appreciate, does this mean that a divorcing spouse should claim as equity half the amount of appreciation AND half the mortgage paydown during the marriage?
Or if it was NEGATIVE, should the divorcing spouse also get hit with half the amount the equity went negative during the marriage? It's only fair that if you get half when it's good, you should get half when it's bad. :(
 

mistoffolees

Senior Member
Conversely, if the home did appreciate, does this mean that a divorcing spouse should claim as equity half the amount of appreciation AND half the mortgage paydown during the marriage?
Of course.

Basically, it doesn't matter if there is appreciation or not. The formula is the same:

Marital equity = equity at end of marriage - equity at start of marriage.

Equity in both cases is Home value - mortgage.

If the equity goes up, it doesn't matter whether it was due to appreciation or paydown of the mortgage (unless separate funds were used for the mortgage payment in which it may be possible to separate that out under some circumstances).
 

LdiJ

Senior Member
Or if it was NEGATIVE, should the divorcing spouse also get hit with half the amount the equity went negative during the marriage? It's only fair that if you get half when it's good, you should get half when it's bad. :(
I disagree with that theory...He owns the home solely and owned it prior to the marriage. She didn't have any legal say in its purchase.

I might agree with that in the case where they both owned the home and were selling it as part of the divorce, but if one of the parties is keeping the home, no matter which party it is, they have a chance to eventually recoup the loss, therefore I don't believe that the other party should share in that loss, as they will never have the opportunity to recoup it.
 

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