ED: premarital asset valuation


#1

Erin,

Could you please help me understand property distribution regarding home & equity of premarital assets.
I bought a house in 2000 for $100K and invested another $50K into it before getting married in 2004, it was titled only in my name and I owed it outright, until sold in 2006 for $200K. I owned the house for 6 years (2000 to 2006) and married in year 4 (2004).

In 2007 I bought another house for $300K and invested $100K in improvements, financed $200K. Mortgage and titled only in my name, as the $200K from the sale of the previous home was used for downpayment.

The house is currently titled and mortgage is only in my name, I am trying to figure out what portion/percent of the equity is mine versus hers? Can you help me? I do not want to sell the house, as it is currently valued only at $380K and would like to know what I should/need to satisfy her interests in this asset.

Summary
2000 bought/invested $150K
2004 married
2006 sold for $200K
2007 bought/invested $400K, financed $200K
Current mortgage $175K.
Appraisal $380K

Thanks again for all your help and insight, it is greatly appreciated.
Felix


#2

The home is marital property as it was purchased during the marriage. There is a presumption that your 200k investment of separate property was a gift to the marriage, and therefore the total equity in the new home is marital in nature and subject to equal division. You do however have an argument that the equity should be unequally distributed in your favor based on your contribution of separate funds.