Saving House Investment

A few months after I got married I received an inheritance, solely in my name. I used $200,000 as a down payment on our house when we moved to NC, which left us with a mortgage of $167,000.00. If my husband and I know get divorced, do we have to sell the house and split the money? What if I stayed in the house, took over the mortgage, and paid him off 50% of the mortgage that’s been paid to date? Basically, is there any way to save my investment?

When you use separate assets to purchase new property, the source of funds rule allows the property to have both marital and separate ownership interests. Under the rule, both the marital and separate estates are both entitled to an interest in the property in the ration which its contribution bears to the total investment in the property. That means that your separate interest may be more or less than the initial investment you made from your separate funds. You can divide the property either by selling it now, or buying your spouse out of his portion of the marital interest. It shouldn’t be only based on the decrease in the mortgage, but also as a ratio of the appraisal value at the time of separation.