Home Equity

[nacraft]

What is the name of your state (only U.S. law)? Texas
Our house is in my wife's name. She refinanced it in her name after her last divorce. We have been married 4 years. Our income has been used to pay all bills they entire marriage. If divorced, am i entitled to any equity of the home?

 

[adjusterjack]

What is the name of your state (only U.S. law)? Texas
Our house is in my wife's name. She refinanced it in her name after her last divorce. We have been married 4 years. Our income has been used to pay all bills they entire marriage. If divorced, am i entitled to any equity of the home?

Basically, yes, but you have to understand the difference between ownership and community property. Texas is a community property state.

She owns it. It's her sole and separate property.

However, you have a marital interest in the VALUE of any equity that has built up during the 4 years you were married.

That marital interest can go to you in a variety of ways.

1 - Cash - if she has it.

2 - Offset by you getting additional higher value assets in exchange for her getting lower value assets or taking on a greater amount of debt. Or, if you both have retirement plans that have to be split 50/50 you can get a higher percentage and she a lower percentage.

3 - If those two options are unavailable, you may be able to force the sale of the house and split the proceeds.

What I suggest you do is start with a balance sheet of your assets and liabilities including her house and see where you stand with regard to potential offsets. Google "balance sheet" to see how to do one.

 

[LdiJ]

Basically, yes, but you have to understand the difference between ownership and community property. Texas is a community property state.

She owns it. It's her sole and separate property.

However, you have a marital interest in the VALUE of any equity that has built up during the 4 years you were married.

That marital interest can go to you in a variety of ways.

1 - Cash - if she has it.

2 - Offset by you getting additional higher value assets in exchange for her getting lower value assets or taking on a greater amount of debt. Or, if you both have retirement plans that have to be split 50/50 you can get a higher percentage and she a lower percentage.

3 - If those two options are unavailable, you may be able to force the sale of the house and split the proceeds.

What I suggest you do is start with a balance sheet of your assets and liabilities including her house and see where you stand with regard to potential offsets. Google "balance sheet" to see how to do one.

And, realistically look at how much equity has really accrued during those 4 years. It may not be as much as you think. The lower the accrued equity during those 4 years, the less likely it will be that you can force a sale of the property.

 

[nacraft]

Equity

And, realistically look at how much equity has really accrued during those 4 years. It may not be as much as you think. The lower the accrued equity during those 4 years, the less likely it will be that you can force a sale of the property.

So im hearing, I only have legal claim to the equity that has built up over the 4 years. In other words, "half the house is not mine..." and if we sell it, i am not entitled to half... correct?

 

[Zigner]

So im hearing, I only have legal claim to the equity that has built up over the 4 years. In other words, "half the house is not mine..." and if we sell it, i am not entitled to half... correct?

In a nutshell, yep.

 

[adjusterjack]

So im hearing, I only have legal claim to the equity that has built up over the 4 years. In other words, "half the house is not mine..." and if we sell it, i am not entitled to half... correct?

Correct.

Determine the market value when you got married. Subtract what the loan balance was then and the result is the equity in the house 4 years ago.

Determine today's market value and subtract the loan balance and the result is today's equity.

Subtract the earlier equity figure from today's equity figure and you have the community equity that has accrued in the 4 years you've been married.

Divide that amount in half to determine your share.

 

[LdiJ]

So im hearing, I only have legal claim to the equity that has built up over the 4 years. In other words, "half the house is not mine..." and if we sell it, i am not entitled to half... correct?

I agree with Zig, but just to be extra clear, you do not have a legal claim to the equity that has built up over the 4 years, you have a legal claim to one half of the equity that has built up over the 4 years.