marital vs separate assets/marital vs separate debts

[dejr123]

What is the name of your state (only U.S. law)? California live in California. Got married in 2000. Wife walked out in 2008.My wife didn't work during the 8 years she lived in my house that I purchased before we were married. My wife also had horrible credit so all credit cards/and the 2nd mortgage on my house are in my name. I should also mention that she withdrew 70,000 from our savings acct without my knowledge a few months before she walked out, This money was from the sale of another property i owned before we were married...but sold a few months after we were married. I actually cleared 90,000 profit from the sale of that property..i took 20,000 and purchased a 13,000 mustang for her and a truck for myself(5000.00) and deposited the remaining 72,000 into my savings acct for which she never contributed one dine!
When I realized the money was gone... I questioned her about it and she stated that she took the money because she felt that it was owed her for all the hard work she put into the house over those eight years. However she failed to mention the 50,000 dollar refinance she took out on the house to do this DIY remodel which she never completed...leaving the house and my finances in a worse situation then before we were married. My only saving grace here is that when she applied for refinance ..the bank told me that because her credit was so bad..that the only way to get refinanced was to take her name off the title(which I NEVER KNEW IT WAS ON THE TITLE TILL THE BANK CALLED ME ABOUT A REFINANCE WHICH I DIDNT KNOW ANYTHING ABOUT) via quick claim deed. So she quick claimed to house to me...
.
When she left..we made a verbal agreement not to use anymore credit cards..and she gave me the stack of cards in her wallet...some of which i had no idea of there existence. Since my wife paid all the bills and handled all the banking...I really didnt know how much debt i was actually in when she left..as she knew my date of birth...ss#, etc.. My point here is that all assets acquired during our 8 years of actually marriage(living under the same roof)were purchased by me...and when she left....she took just about everything we had bought, her.car,..jewelry,furniture, etc. Leaving me all the dept! And now that it has been 5 years since she left...those marital assets have either been wrecked or sold by her.



Last year i was sued by a major cc company for $12,000.This dept was incurred by my wife after she walked out, however since the cc acct was opened while she was still in my house...(2006)and because I never got a legal separation from her to protect myself...they came after me once she defaulted on the card payments...keep in mind that she had been making the payments and re using the account up until 2011 when she stop making payments...Balance on the card when she left in 2008 was 0.
I recently settled with cc company for 5 grand. And now i want to finally divorce this woman before other dept's she has incurred start popping up.
I am now retired and on a fixed income(social security)and I am attempting to file for this divorce myself since i cant afford a lawyer. I dont think my wife will contest the divorce with regards to community property split...because there isnt any. I still own the house we lived in..but with the refinance and the drop in property values..there isnt much equity there if any..plus she did quick claim the deed to me when we did the refi. So now that u have a little history with regards to our marriage...my question is on form 140 or 141 ..it asked if there are any marital assets or debts..and I was going to simply so no to both and to make things short and simple...or should I go ahead and list my house as separate property and claim no debt?
Last edited by dejr123; Today at 04:30 AM.

 

[ecmst12]

All the debt and assets acquired during the marriage are marital. That includes any equity in your home. It includes the money from the sale of the other house if you comingled it with marital funds. You need a lawyer.

 

[tranquility]

California deals with community, not marital assets. Gain in house equity, if it maintained separate property status, does not change to community. I did't read more than a line or two of the OP, but there needs to be some community assets paid for the house mortgage for some of the house to change to community status. ( where the appreciation of the community portion would be community)

 

[Ohiogal]

What is the name of your state (only U.S. law)? California live in California. Got married in 2000. Wife walked out in 2008.My wife didn't work during the 8 years she lived in my house that I purchased before we were married.

So you might end up paying spousal support. And it is now 2013 and you are still referring to her as your wife -- so you are still married, correct?

My wife also had horrible credit so all credit cards/and the 2nd mortgage on my house are in my name

Okay. When did you get the second mortgage? When was the credit card debt accrued.

I should also mention that she withdrew 70,000 from our savings acct without my knowledge a few months before she walked out, This money was from the sale of another property i owned before we were married...but sold a few months after we were married. I actually cleared 90,000 profit from the sale of that property..i took 20,000 and purchased a 13,000 mustang for her and a truck for myself(5000.00) and deposited the remaining 72,000 into my savings acct for which she never contributed one dine!

Well you were generous. The $72000 was placed in a joint account actually, right? If a joint savings account then it was also her money and she could remove it.

When I realized the money was gone... I questioned her about it and she stated that she took the money because she felt that it was owed her for all the hard work she put into the house over those eight years. However she failed to mention the 50,000 dollar refinance she took out on the house to do this DIY remodel which she never completed...leaving the house and my finances in a worse situation then before we were married. My only saving grace here is that when she applied for refinance ..the bank told me that because her credit was so bad..that the only way to get refinanced was to take her name off the title(which I NEVER KNEW IT WAS ON THE TITLE TILL THE BANK CALLED ME ABOUT A REFINANCE WHICH I DIDNT KNOW ANYTHING ABOUT) via quick claim deed. So she quick claimed to house to me...

She did NOT quick claim the house to you. She quit claimed the house to you.

When she left..we made a verbal agreement not to use anymore credit cards..and she gave me the stack of cards in her wallet...some of which i had no idea of there existence. Since my wife paid all the bills and handled all the banking...I really didnt know how much debt i was actually in when she left..as she knew my date of birth...ss#, etc.. My point here is that all assets acquired during our 8 years of actually marriage(living under the same roof)were purchased by me...and when she left....she took just about everything we had bought, her.car,..jewelry,furniture, etc. Leaving me all the dept! And now that it has been 5 years since she left...those marital assets have either been wrecked or sold by her.

Okay. Your verbal agreement means nothing however. You are still married.

Last year i was sued by a major cc company for $12,000.This dept was incurred by my wife after she walked out, however since the cc acct was opened while she was still in my house...(2006)and because I never got a legal separation from her to protect myself...they came after me once she defaulted on the card payments...keep in mind that she had been making the payments and re using the account up until 2011 when she stop making payments...Balance on the card when she left in 2008 was 0.

Okay.

I recently settled with cc company for 5 grand. And now i want to finally divorce this woman before other dept's she has incurred start popping up.
I am now retired and on a fixed income(social security)and I am attempting to file for this divorce myself since i cant afford a lawyer. I dont think my wife will contest the divorce with regards to community property split...because there isnt any. I still own the house we lived in..but with the refinance and the drop in property values..there isnt much equity there if any..plus she did quick claim the deed to me when we did the refi. So now that u have a little history with regards to our marriage...my question is on form 140 or 141 ..it asked if there are any marital assets or debts..and I was going to simply so no to both and to make things short and simple...or should I go ahead and list my house as separate property and claim no debt?

You can't state that there is no marital debt. If she ran up charge cards there might be debt. When was the house last appraised?

 

[latigo]

All the debt and assets acquired during the marriage are marital. That includes any equity in your home. It includes the money from the sale of the other house if you comingled (SIC) it with marital funds. You need a lawyer.

NONE OF THE ABOVE IS TOTALLY CORRECT!

Only a person devoid of even a rudimentary knowledge of property law and motivated by ulterior desires, such as yourself, would be so naïve and reckless as to falsely declare:

1) That every debt incurred during the marriage relationship is jointly owed, or

2) That all property received during the marriage is owned jointly, or

3) That the intermingling of separate with community property automatically transmutes the former into the latter, or

4) That the untitled spouse has a vested interest in any enhanced value of the other’s separate estate.

__________________

Debts that are individually incurred solely with respect to and that are shown to have exclusively benefited a spouse’s sole and separate estate are not categorically jointly owed!

Property received by gift, devise or in exchange for separate property is not characterized as community or jointly owned property.

The earnings of either spouse while living separate and apart from the other are separate and not community property. (California Family Code Section 771(a)

It is only when the intermingling of separate and community property prevents tracing and identification of the individual categories that a transmutation is said to have occurred.

It is a generally adhered to principle of marital property law that when the wife is living estranged and apart from her husband she is not responsible for debts subsequently incurred by her spouse, whether or not they benefit the community estate.

And there the husband is only liable for her debts separately incurred and in providing for her necessaries.

The untitled spouse is only entitled to share in the increased value of the other’s separate property when that equity can be attributed to the investment of community property.

(Most common law states treat equity due to increased market value of separately owned real property as a marital asset. But many community property states do not, where only the enhanced value attributed to community effort is considered.)
____________________

In sum, you should consider talking less about things you do not understand and listening more and perhaps gain some limited understanding.

 

[ecmst12]

California is a community property state. That means everything you get during the marriage belongs to both of you - positive and negative cash flow items.

 

[ecmst12]

There might be rare circumstances where a married person could have pre-marital assets or an inheritance or gift which they kept separate from community property which they could use to purchase something which would also be separate property (provided that marital income wasn't used to maintain said acquisition), but there is no indication that such circumstances exist here.

In a community property state, income from either spouse's job is community income, so anything that is purchased or maintained with this money is also community. And credit cards taken out by either spouse are owed by both, and (as OP already learned), either can be successfully sued for repayment.

Money deposited into a joint savings account (which it must have been, otherwise wife wouldn't have been able to take money out of it) is also community property and either party can legally take all of it. If he had filed for divorce soon after this happened, he probably could have worked out in the divorce settlement that the money she took would count towards her share of the marital assets. Now, he will have a much harder time making that argument.

Equity in the marital home which is maintained with marital income is going to be marital even if the home itself was a premarital asset.

So, he still desperately needs an attorney to sort out the mess he has allowed to happen by doing nothing for the past 5 years. The way to fix it is NOT by lying on the paperwork.

 

[LdiJ]

There might be rare circumstances where a married person could have pre-marital assets or an inheritance or gift which they kept separate from community property which they could use to purchase something which would also be separate property (provided that marital income wasn't used to maintain said acquisition), but there is no indication that such circumstances exist here.

In a community property state, income from either spouse's job is community income, so anything that is purchased or maintained with this money is also community. And credit cards taken out by either spouse are owed by both, and (as OP already learned), either can be successfully sued for repayment.

Money deposited into a joint savings account (which it must have been, otherwise wife wouldn't have been able to take money out of it) is also community property and either party can legally take all of it. If he had filed for divorce soon after this happened, he probably could have worked out in the divorce settlement that the money she took would count towards her share of the marital assets. Now, he will have a much harder time making that argument.

Equity in the marital home which is maintained with marital income is going to be marital even if the home itself was a premarital asset.

So, he still desperately needs an attorney to sort out the mess he has allowed to happen by doing nothing for the past 5 years. The way to fix it is NOT by lying on the paperwork.

Disagree vehemently with the bolded. Equity that accrued DURING THE MARRIAGE would be marital if the home is maintained with marital assets. Not any equity that accrued prior to the marriage.

 

[ecmst12]

That's what I meant. I'm sorry, I just realized that I did not specifically say that in either of my posts - definitely only the equity that accrued DURING the marriage.

 

[Bali Hai]

NONE OF THE ABOVE IS TOTALLY CORRECT!

Only a person devoid of even a rudimentary knowledge of property law and motivated by ulterior desires, such as yourself, would be so naïve and reckless as to falsely declare:

1) That every debt incurred during the marriage relationship is jointly owed, or

2) That all property received during the marriage is owned jointly, or

3) That the intermingling of separate with community property automatically transmutes the former into the latter, or

4) That the untitled spouse has a vested interest in any enhanced value of the other’s separate estate.

__________________

Debts that are individually incurred solely with respect to and that are shown to have exclusively benefited a spouse’s sole and separate estate are not categorically jointly owed!

Property received by gift, devise or in exchange for separate property is not characterized as community or jointly owned property.

The earnings of either spouse while living separate and apart from the other are separate and not community property. (California Family Code Section 771(a)

It is only when the intermingling of separate and community property prevents tracing and identification of the individual categories that a transmutation is said to have occurred.

It is a generally adhered to principle of marital property law that when the wife is living estranged and apart from her husband she is not responsible for debts subsequently incurred by her spouse, whether or not they benefit the community estate.

And there the husband is only liable for her debts separately incurred and in providing for her necessaries.

The untitled spouse is only entitled to share in the increased value of the other’s separate property when that equity can be attributed to the investment of community property.

(Most common law states treat equity due to increased market value of separately owned real property as a marital asset. But many community property states do not, where only the enhanced value attributed to community effort is considered.)
____________________

In sum, you should consider talking less about things you do not understand and listening more and perhaps gain some limited understanding.

So much for the law being gender neutral....

 

[Bali Hai]

That's what I meant. I'm sorry, I just realized that I did not specifically say that in either of my posts - definitely only the equity that accrued DURING the marriage.

That oversight suggests how you really feel.

 

[tranquility]

In a community property state, income from either spouse's job is community income, so anything that is purchased or maintained with this money is also community. And credit cards taken out by either spouse are owed by both, and (as OP already learned), either can be successfully sued for repayment.

It is NOT the case that anything "maintained" with community property transmutes to community property. Especially with something easily traceable, like a house, the amount of the property paid for with community assets COULD be transmuted to community property. It would be a percentage issue calculation related to values. There is a proviso to that as well--which is why I said could. While amounts earned in labor (wages/salary) are community assets, if a person were to deposit them in a separate account and use those funds to pay the mortgage, the community gains no real ownership of the property. (Although the community could request reimbursement of the funds.) Since ownership tends to deal with the equity of the property, in both cases it is the hard cash that is paid for equity that matters. The interest on the funds are not a part of the calculation for transmutation.

Equity in the marital home which is maintained with marital income is going to be marital even if the home itself was a premarital asset.

Marital property is not community property. They are different. But, this sentence is otherwise fairly correct if we're talking percentage of the money paid into the equity. The principal of the loan, not the interest, paid during marriage in relation to the amounts paid to purchase and pay down debt prior to marriage. (Subject to the above proviso.)

LdiJ:

Disagree vehemently with the bolded. Equity that accrued DURING THE MARRIAGE would be marital if the home is maintained with marital assets. Not any equity that accrued prior to the marriage.

Case law does not distinguish appreciation per times in California. It is simply a percentage based on community to separate property interest in ownership.

 

[latigo]

California is a community property state. That means everything you get during the marriage belongs to both of you . . .

False: Property individually received by way of gift, devise or descent is not community owned!

Nor is the income derived from separate property that represents the depletion of oil, mineral or timber reserves classified as community property.

Nor is the growth in separately owned livestock.

Nor are civil tort claims/awards/settlements delegated to compensate for personal injuries, pain and suffering treated as a community asset.

Nor are retirement benefits not effected by community contribution treated as community property.

That's what I meant. I'm sorry, I just realized that I did not specifically say that in either of my posts - definitely only the equity that accrued DURING the marriage.

Questionable as some community property law states treat the increased market value of separately owned land due to inflationary factors as retaining its separate character.

There might be rare circumstances where a married person could have pre-marital assets or an inheritance or gift . . . .

Rare? A naïve, dilettante assumption. Agreements made in contemplation of marriage that treat with the future management and ownership of separately owned assets and the rents, issues and profits therefrom are not RARE, but COMMON PLACE!

In a community property state, income from either spouse's job is community income . . . . .

An uniformed contradiction of Section 771(a) of California Family Code that expressly characterizes the income of either spouse while living separate and apart as their separate property!

. . credit cards taken out by either spouse are owed by both . . . , and (as OP already learned), either can be successfully sued for repayment.

The OP was not legally obligated to pay his estranged wife’s credit card charges incurred when living apart OTHER than those charges shown to be used to acquire necessaries!

the money she took (from the joint account) would count towards her share of the marital assets. . . .

Not necessarily true. It would depend on the remoteness of the transaction and the wife’s disposition of those funds and the application of the principle of laches.

Only when there is clear evidence of waste will a divorce court entertain a request for an accounting of the spouses’ individual expenditures.

Moreover if voluntary cohabitation continued after discovery of such withdrawals, the principal of condonation may apply.
________

But keep up with the pretentiousness, ecm. As you undoubtedly will. You’ve already gathered enough rope to dispatch yourself and a small cellblock of bad guys.

 

[ecmst12]

You have absolutely no business calling anyone else pretentious. Unless maybe you are going off the principal of "takes one to know one".

 

[tranquility]

The key case on such matters is In re Marriage of Moore, 28 Cal.3d 366 (1980) from the California Supreme court. [http://scocal.stanford.edu/opinion/re-marriage-moore-30599]

Now, if we were to pretend that many years ago a person took a class on such matters and the professor gave a couple problems to the class to see if the case were understood, we might also pretend that computers store much information and it could be found again if searched for. One poor son of a gun's answer might look something like the following:

1. Wanda buys a house in Fresno for $100,000, paying $20,000 down and signing a note (secured by a mortgage) for the $80,000 balance. Thereafter, until her marriage to Harold, Wanda makes mortgage payments that reduce the loan balance by $10,000 (to $70,000). After the marriage, Wanda continues to make the mortgage payments out of her salary until the note is paid in full in 1997. W dies in 1999, leaving a will that devises “all my property” to her nephew Norman. The house is now worth $400,000. Who takes what?

When there is no longer any debt on an installment purchase before marriage, payment with CP funds after marriage, or during marriage W inherits land subject to mortgage, pays off not with CP funds, the Proration or Buy-In rule applies.

The community estate takes a pro rate portion of the property measured by the amount of principal debt reduction attributable to the expenditure of community funds.

Numerator is the principal debt reduction attributable to CP ($70,000) and the denominator is the purchase price ($100,000). Here the CP interest is 7/10 times the value at trial of $400,000 for $280,000 CP.

2. Wanda buys a house in Fresno for $100,000, paying $10,000 down and signing a note (secured by a mortgage) for a $90,000 balance. Thereafter, until her marriage to Harold, Wanda makes mortgage payments that reduce the loan balance by $10,000 (to $80,000). Wanda and Harold are divorced in 2001. At the time of the divorce, the house is valued at $400,000, and the principal balance of the note has been reduced by $20,000 with community funds (Wanda’s salary). Who takes what?

The same rule applies here. The numerator is the principal debt reduction attributable to CP ($20,000) with the denominator the purchase price ($100,000). Here the CP interest ratio is 1/5.

The note is not paid off, however, so we can’t just apply it to the whole house. That would give too much to the Community. In Re Moore now takes the calculation to SP dealing with equity and all that ****. Here, we’ll stay in CP. We must now find how much the house has appreciated in value. We’ll take the CP interest in that and add in any CP funds paid for the total CP interest in the property.

At time of trial the house is $400,000 it was purchased for $100,000 so has appreciated $300,000. (Time of trial value minus purchase price.) We multiply that by the CP ratio (From the principal debt reduction calculated—proration/buy-in rule.) of 1/5 and find the CP interest is $60,000.

The community also directly put in some funds. Here it was $20,000. We add these “DIP” funds (Down payment, Improvements, Principle reduction-subject to the whole other set of rules of CP to SP. But, all problems on the house do not seem to include this calculation although might include “trick” numbers of insurance or taxes.) to our CP portion of appreciation ($60,000) and get a CP interest on the house of $80,000.