Need clarification please. When filing for equitable distribution of the marital home, is the spouse who left the home only entitled to half the equity on the date of separation? This is what someone told me.
I thought that the spouse who left the home would.be entitled to the half of the current equity, with consideration or credit given to the spouse who may have made improvements to the home that increased the value or principal payments that were made to decrease the mortgage balance.
Both spouses are entitled to half the marital equity in the home, assuming it was purchased during the marriage.
The marital equity is determined by the value on the date of separation minus the balance owing on the mortgage and any home equity lines of credit on the date of separation.
However, any passive increases in value of the home due to real estate market increases are also marital property. Therefore, it is usually best to determine marital equity using the current value of the home less the mortgage balance on the date of separation. Using the mortgage balance on the date of separation ensures that the party living in the home and making the mortgage payments each month gets to keep the active increase in equity (due to paying the mortgage and decreasing the principal balance) as their separate property.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
So are you saying that if the home increased in value for example 100k AFTER the date of separation that 100k is also marital property even though the increase in value took place after the separation? I’m confused sorry.
Yes, correct. If the house increased in value after the date of separation due to passive real estate market increases, then the current value becomes the marital value because the passive increase in value is based on a marital asset, therefore the passive increase in value is also a marital asset. The key is that the increase is passive and not active (meaning neither party actively contributed to increasing the value).
This is all assuming the house is 100% marital property and was purchased during the marriage.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.