Real Estate Equity after Divorce

[12knots]

California :
Primary residence property + 3 attached rentals owned by man for ~12 years with ~50% of mortgage remaining. At that point, man marries and new wife pays off loan. 21 years later, if divorcing, generally how would equity be split? Current title on property is split between man's trust and family trust with unknown terms of each.

 

[Zigner]

California :
Primary residence property + 3 attached rentals owned by man for ~12 years with ~50% of mortgage remaining. At that point, man marries and new wife pays off loan. 21 years later, if divorcing, generally how would equity be split? Current title on property is split between man's trust and family trust with unknown terms of each.

The honest answer is: It depends.
The follow-up is that you (well, the involved party, who may or may not be you) really should be speaking to a divorce attorney who can review the specific facts. Looking for "general" answers from random strangers on the internet is really not going to be useful.

 

[LdiJ]

California :
Primary residence property + 3 attached rentals owned by man for ~12 years with ~50% of mortgage remaining. At that point, man marries and new wife pays off loan. 21 years later, if divorcing, generally how would equity be split? Current title on property is split between man's trust and family trust with unknown terms of each.

Originally the property would have been considered to be premarital property and would have been the man's separate property. However, the property became comingled/community property when the wife paid off the mortgage using either her separate property or community property. I suspect it is going to be a 50/50 split at this point. However it would behoove both parties to get lawyers involved.

 

[adjusterjack]

California :
Primary residence property + 3 attached rentals owned by man for ~12 years with ~50% of mortgage remaining. At that point, man marries and new wife pays off loan. 21 years later, if divorcing, generally how would equity be split? Current title on property is split between man's trust and family trust with unknown terms of each.

Doesn't matter how the property is titled. She's basically entitled to half the equity that has accumulated during the marriage. If you have to sell the property to pay her, well, that's what you gotta do.

Or, you can compromise. If you have the cash, buy her out and keep the properties.

 

[LdiJ]

Doesn't matter how the property is titled. She's basically entitled to half the equity that has accumulated during the marriage. If you have to sell the property to pay her, well, that's what you gotta do.

Or, you can compromise. If you have the cash, buy her out and keep the properties.

I think that it is more than just what accumulated during the marriage, because she paid off the mortgage. I suspect that she is entitled to 1/2 of the equity, period. I suspect that it became community property as soon as she paid off the mortgage.

 

[adjusterjack]

One thing is almost guaranteed. There will be a fight and the lawyers will make a lot of money.

 

[Litigator22]

Originally the property would have been considered to be premarital property and would have been the man's separate property. However, the property became comingled/[sic]community property when the wife paid off the mortgage using either her separate property or community property.(?) . . .

Excuse me, but the above expression is an utter falsehood. Misleadingly false in that it would have the OP mistakenly believe that in California the singular act(s) of apply community assets (or those separately owned by the non-titled spouse) in the payment of a mortgage lien covering real property theretofore thought to be separately owned by the titled spouse results in such a commingling of assets as to transmute the property from separate to community. And that is contrary to California law!

If you continue to pretend to be a lawyer, you ought to try doing what lawyers do: Read law! And here you might start by studying IN RE MARRIAGE OF DAWNEL AND FRANK BONVINO, Cal. App Ct. 2nd App Div Case No. B58376 Los Angeles County (2015) and the scores of case law cited in that comprehensive coverage of the subject of transmutation. https://caselaw.findlaw.com/court/ca-court-of-appeal/1717925.html]

There you would learn that:

"A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to or accepted by the spouse whose interest in the property is adversely affected." Cal. Fam. Code Section 852 Subd. (a)

So much for your self-inspired "comingled/[sic]community property theory!

 

[LdiJ]

Excuse me, but the above expression is an utter falsehood. Misleadingly false in that it would have the OP mistakenly believe that in California the singular act(s) of apply community assets (or those separately owned by the non-titled spouse) in the payment of a mortgage lien covering real property theretofore thought to be separately owned by the titled spouse results in such a commingling of assets as to transmute the property from separate to community. And that is contrary to California law!

If you continue to pretend to be a lawyer, you ought to try doing what lawyers do: Read law! And here you might start by studying IN RE MARRIAGE OF DAWNEL AND FRANK BONVINO, Cal. App Ct. 2nd App Div Case No. B58376 Los Angeles County (2015) and the scores of case law cited in that comprehensive coverage of the subject of transmutation. https://caselaw.findlaw.com/court/ca-court-of-appeal/1717925.html]

There you would learn that:

"A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to or accepted by the spouse whose interest in the property is adversely affected." Cal. Fam. Code Section 852 Subd. (a)

So much for your self-inspired "comingled/[sic]community property theory!

There is a difference between property ownership and marital interest in assets. You know that so why you decided to spout this nonsense makes no sense to me.

The property remains the property of the person who owned it. However, we all know that in a divorce situation the value of comingled assets are subject to division as part of the property settlement. This is clearly a case of comingled assets because either marital assets or the wife's separate assets were used to pay off the mortgage on the property. Therefore the "community" has an interest in the equity in the property, which again, you know or should know.

You do not do this poster a favor by giving them the impression that the value of those assets are not community assets at this point. However, since they clearly need to be working with a divorce attorney that attorney will clear up any discrepancies in their thinking.