Tuesday, August 14, 2007

My Husband And I Both Own Property. How Do We Divide It?

Division of Property Information and Divorce help provided by an experienced family law and divorce attorney serving the Temecula, Murrieta, Menifee, and Hemet areas of Riverside County, California.

Dear Famularo & Associates:
I am considering a divorce after 1 year of marriage and the question is about property division. I came into the marriage with a house which was sold 2 months later. After that the money was reinvested into a rental property. I put my husband's name on the deed. He came into the marriage with a house and a commercial building. My name is not on the properties he own. How do we divide the property?
-- K from Riverside

Dear K:
Your property is probably entirely yours. Thank goodness the price of real estate has gone down! You would receive your entire downpayment back from that property right off the top. Since the mortgage is paid for entirely by rental income, there is no time, effort or skill going into the payment of the mortgage. Thus, simply by paying the mortgage on the building there is no community property interest which has been accumulated.

However, you did put your husband's name on the property. When you divide property, your husband will likely receive an interest in the appreciation of the property from the time you placed him on title until the time you divorce. So, let's assume the building is still worth $200,000 today, and that you put $100,000.00 down on the property, and carried a $100,000.00 mortgage.

If so, you get back $100,000.00 off the top because you put down $100,000.00 toward the purchase of the prioperty (this is called a 2640 reimbursement). If the property is still worth $200,000.00, the mortgage is $100,000.00, so there is no community interest in the property.

On the other hand, if the property has appreciated $50,000.00 in the last year, there would be a total equity amount of $250,000.00. You would still get back your $100,000.00. The balance of the equity ($200k - $100k= $50k) or $50,000.00 is then split between you. This means that your husband would get 1/2 of the appreciation, or in this case, $25,000.00.

His property was owned before his marriage to you. He never put you on title, and the mortgage was paid by renters. Thus, no communtiy property was used to pay down the mortgage. This means that this building will be his free and clear. However, even if your husband had put your name on the property, since the market is currently down it is likely that you would not have earned any interest in the building any way.
-- Famularo & Associates

If you live in the Temecula, Murrieta, Hemet or Riverside areas of Riverside County, California and have any questions about obtaining property rights or if you need divorce information, please feel free to contact our office to set up an appointment with a divorce lawyer at: (951) 816-9543.

For more information, please visit our websites: Temecula Divorce Attorney, Family Lawyer in Temecula, or Family Law Info



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