Property Settlement


#1

I’m attempting to buy my wife’s share out of home before getting a divorce. This is our only issue to decide and we are trying to settle without going to court. It was her decision to leave and I’m living in the house and paying the mortgage and separate property tax and insurance myself. We have been separated a little over a year and were married for three years. We purchased the house before marriage, the deed is in both our names but the mortgage is only in my name. From my understanding she would be entitled to half the equity aquired before the date she left. This would mean the balance of the loan when she left subtracted from the true market value of the home at that time and divided by two. She is saying that she is due what she put on down payment and closing costs plus half the equity that is obtained by subtracting the balance when she left from the original amount of the loan. We both paid the same amount to the down payment and closing costs. Also we have marital debt in a new heating system that was bought several months before she left. Since this was purchased before she left and is related to the property wouldn’t this be deducted from the balance as well even if it is only in my name. Any info would be appreciated.


#2

The debt for the heater is a martial expense. It was incurred prior to the separation, and undoubtedly increase the value of the home. If you both contributed an equal amount of your separate funds to the home at the time of purchase, that is a non-issue. Your ex is entitled to one half of the value of the home on the date of separation less the loan balance due on that date.


#3

So if the apprasail is back dated to show value of the house when she left and includes the increased value of the new heating system, then the total amount paid of the system would be deducted from the equity as well. Would you need the value when she left or would current be sufficent since it was only a little over a year. Also would I receive credit for any part of the property tax/homeowners insurance I have paid for the year she has been gone. I don’t have escrow.


#4

The date of separation value is appropriate, though a current value can be used if both parties agree. It would also be appropriate to include the taxes and insurance paid for the year she was gone.


#5

So the taxes/insurance for the property that I paid myself for the 2009 year after she left in Dec.08 should be deducted from the market value as well even though she wasn’t living there. Thanks.


#6

You should be entitled to a credit. In other words, if the total equity in the home is 100k, your share would be 50k. If the taxes and insurance you paid totalled 2k, you should receive 52k, and your ex 48k.


#7

So she would be liable for the taxes/insurance eventhough she wasn’t living in the house and not contributing to the mortgage and with her part of equity ending when she left. I don’t escrow. I assume the martial debt of the heating system that was purchased before she left would be credited in the same way {I have since paid for total) with the total price of the system being deducted from her part of the equity.


#8

The tax debt and insurance was a debt incurred on the property, which is a marital asset. You paid the bill, and should receive credit for doing so.


#9

I’m a little confused. Should this example be (52k for me and 48K for her) or (51K for me and 49K for her). Seems the original example wouldn’t have each paying half for the tax/insurance.


#10

My apologies, you are correct.