Home Equity

I am married for the 2nd time. My spouse moved into the house that I already owned and which was deeded in my name only. I had a certain amount of equity in the home at the time that I got remarried. We received a 2nd mortgage in both names which was used to make capitol improvements and was subsequently refinanced in my name only. My spouse’s name has never been added to the deed. If we were to divorce, would I be entitled to all of the equity that I had in the property prior our marriage, or would my spouse be entitled to half of the total equity upon sale of the house?

The improvements on the home may be considered marital in nature as they are an active act which cause and appreciation in value.

This doesn’t answer the question. I assumed that my spouse would be entitled to SOME of the equity, but would they be entitled to half of the equity that I had in the home prior to our marriage?

No, that is separate property.

I am in a similar situation. My ex did not contribute any funds toward the mortgage or utilities during the time he and his kids lived with me prior to and during a 4year marriage. Improvements were made, but depending on how you look at it, they came from my income as well. Does the fact that he did not contribute to the mortgage/utilities (basically living for free) factor in to his claim about getting credit for some of the improvement funds?

It does not matter who paid for the mortgage or the expenses of the home.

It sounds like this house might have a dual classification of both separate property and marital property. It would be separate property if you purchased the house prior to the date of marriage. It would also be marital property if marital funds (funds earned during the marriage, regardless of who earned them) were used to pay on the mortgage and used to pay for improvements to the house.

How this would work practically is that your husband would be entitled to half of (1) the amount of the principal reduction on the mortgage during the marriage (date of marriage to date of separation) and (2) half of the cost of improvements or if able to determine, half of the added value due to the improvements.

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

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