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Moore Marsden Rule - How community property is divided

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jameshogg

Joined: 20 Dec 2005
Posts: 4291
Location: nevada
509.34 Dollars($)

Post subject:

Hi madeinohio!

If you are interested to know the community property interest you are entitled to, then you will have to calculate it by applying the Moore Marsden Rule.

Quote:

“In 2002 we refinanced the house and it appraised for $400k.”

As you have mentioned that the property has been refinanced, there will be certain changes in the values of the parameters included in the Moore Marsden Rule. The new loan will be based on the value of the property during refinance. So, when you are calculating the community interest in refinanced property with the help of Moore Marsden Rule, you will have to replace the purchase price with the value of the property at the time of refinance.

Quote:

“In 2008 we sold the house for $779k and owed about $500k on the loan. After fee's the profit was 220k. I was thinking that amount would be split, but they're telling me I'm only entitled to $66,300.”

Normally, the amount should be split equally. You can ask your wife’s lawyer to show you the calculation through which he is getting $66,300. It will be easier for you to understand the figures.

Quote:

“…in 2004 we refinanced, isn't she only entitled to that amount which she solely contributed to? We both paid for the house and we both lived in it.”

Yes, she is entitled to get the amount she has contributed to. But this amount will be calculated from the time both of you refinanced the property.

Quote:

“In California, is this how the split is done or is she only entitled to her original down payment of 22k as family code 2640 implies.”

She will not be entitled to the down payment because you were not married at that time. Thus, the Moore Marsden Rule will not apply in this case.

Thanks.

alpha9beta27

Joined: 08 Dec 2008
Posts: 2

2.27 Dollars($)

Post subject: Moore/Marsden Question

Please help...I've been reading up on the Moore/Marsden subject, but I havent been able to find one that is like mine... Basically, in 2006, my spouse and I purchased a home for $500,000. To get the downpayment, I sold a house I owned prior to marriage and applied $90,000. My spouse put in $10,000 for the down and $15,000 came from community funds. We are going to sell the house as a result of the divorce, and it was appraised for $900,000. My question is: How much of the equity ($900,000-$500,000 = $400,000 equity) is my portion via the Moore/Marsden calcs? Since the majority of the downpayment came from my pre-marital funds, shouldn't I get that same % of the equity? I was told that I would just get my $90,000 back, and that the rest of the equity would be split 50-50...is this true?? It hardly seems fair considering we would not have even been able to purchase the house had I NOT sold my first house to use as the downpayment.... I live in California...If someone can please break it down for me...I'D GREATLY APPRECIATE IT!!!!

Niicss

Niicss

Joined: 03 Oct 2005
Posts: 2620
Location: New Jersey
409.63 Dollars($)

Post subject:

Hi alpha9beta As far as I can understand your question, I feel you have been given the correct information. The $90,000 that you gave for the property did not come from the community funds. It is a part of your separate property. You will get that back (as you have mentioned) and the rest of the equity will be divided 50-50 among both of you. To calculate the community property interest according to Moore Marsden Rule, you need to use the formula given below: CP = PPCP + (CP% x MApp) In this formula: CP - Community property interest PPCP - Payments towards Principal from community property CP% - Community property percentage = PPCP / Purchase Price MApp - Appreciation during marriage For Separate Property, the interest can be calculated as: SP = DP + PPSP + Pre-MApp + (SP% x MApp) In this formula: SP - Separate property DP - Down payment on property PPSP - Payments towards Principal from separate property Pre-MApp - Pre-marriage appreciation SP% - Separate property percentage = 100% - (PPCP/Purchase Price) Thus, the down payment that you made for the property is considered as your separate property. Thanks. _________________ Good is the Enemy of Great.

alpha9beta27

Joined: 08 Dec 2008
Posts: 2

2.27 Dollars($)

Post subject:

PLEASE SOMEONE CHECK THIS!!!!! I'm still not clear WHERE it shows the equity: Purchase Price: $500,000 Original Loan Amount: $400,000 Amount Still Owed: $380,000 Principal Paid during marriage: $20,000 DownPayment that was Community Property: $15,000 DownPayment that was Separate Property: $85,000 Appraised value: $900,000 From above: PPCP = $20,000 + $15,000 = $35,000 CP% = $35,000/$500,000 = 7% MApp = $900,000 - $500,000 = $400,000 So, CP = $35,000 + (.07* $400,000) = $63,000 This CP is split 50-50, right? so $32,000 each. For Separate Property, according to formula: DP = $85,000 PPSP = $0 Pre-MApp = $0 SP% = 100% - ($35,000/$500,000) = 93% So, SP = $85,000 +0+0+(.93*$400,000) = $457,000 WHERE is the equity part??? Please someone help me...what am I doing wrong??? Bottom line is...he's claiming he gets: Appraised value of $900,000 - Amount owed still of $380,000 = $520,000 That $520,000 - My sep prop DP of $85,000 = $435,000 This $435,000 /2 = $217,500 IS THIS RIGHT???? It doesnt seem to take any of the MM calculation into account... THANX IN ADVANCE FOR YOUR HELP!!!!!

jerry

Moderator

Joined: 17 Oct 2005
Posts: 1778
Location: MICHIGAN
266.03 Dollars($)

Post subject:

Hi alpha9beta, The equity I suppose will be your interest in the property. In your case, you will be receiving the CP = $32,000 and the separate property Sp = $457, 000. Thus, you will be receiving: 32,000+457,000 = $489,000. Thanks, Jerry

ray

Guest

Post subject: quit claim, community property

Got married in 1991, got house together in 1995, quit claimed because of bad credit (student loans)and pressure from her family. Filed bankrupcy in 1998, cleared bad credit, now getting divorced (2009),she claims the house is all hers seperate property? Used quitclaim to throw me out of house. is this legal? the quitclaim was a temp fix according to her family. They never put my name on the deed. her mother was only a co-signer. What is the outcome?

Samantha

Community Mentor

Joined: 16 Sep 2005
Posts: 1602
Location: MASSACHUSETTS
149.70 Dollars($)

Post subject:

Did you sign on the quitclaim deed? Until and unless you have signed, you retain an interest in the property. I don't think the property is all hers because both of you purchased it.

Quote:

They never put my name on the deed

You mean the title to the property didn't have your name on it?
_________________
Know how to compare lenders with mortgage booklet

GEO

Guest

Post subject: MOORE/MARSDEN

IM HAVING TROUBLE UNDERSTANDING HOW THE EQUITY IS SPLIT AFTER A DIVORCE IS FINAL. THE MOORE MARSDEN RULE APPLIES IN OUR CASE AND I DO UNDERSTAND THAT IM ENTITLED TO ABOUT 9.85 % OF THE COMMUNITY INTEREST. IF THE HOUSE IS SOLD A YEAR AFTER OUR DIVORCE DO I STILL RETAIN AN INTEREST IN THE SALES PROCEEDS?

Guest

Post subject:

Yes, you will still retain the interest in sale proceeds of the property though the property sells after a year of your divorce.

Dan9317

Guest

Post subject: Houseprofits

Before we were married, in New York State, my wife put most of the $15,000.00 profit from her old house into the new house we bought together. Both of our names are on the deed of the house. We are seperating now. I am moving into an apartment, and she, who makes almost twice the money I do, is buying another house. She has told me that she in entitled to recieve $15,000.00 of the profits from our house, and anything after that we split 50/50. Is this true?

Carmela

Guest

Post subject:

Yes, she will be entitled to get the $15,000.00 as she has put the money that she received from selling her old property. The rest of the sale proceeds will be divided equally between both of you.

have a clue

Guest

Post subject:

My husband and I have been married 13 years. We bought our house 10 years ago. My name is not on the title because I had less than good credit. Does the Moores/Marsden Calulation apply to my situation?

Guest

Post subject:

If you are living in a community property state and if the payments for the property has been made with community funds then your will have community interest in the property.

Jeff G.

Guest

Post subject: Moore-Marsden

In a consultation, a divorce lawyer told me that M-M. I told him my situation was that my in-laws bought a house for me and their daughter and the grandchildren to live in 10 years into our marriage. They told us multiple times that they bought the house for us but their name was still on the property deed. During those years, I only paid them twice for "rent" in the first two months and then there was no charge for the "rent/mortgage" because the house was a gift bought for us. This went on for 5 years. I paid for the utilities in my name. I've been told by the father-in-law 6 months ago that the mortgage on the house is fully paid for. The lawyer says I am entitled to the appreciation value from the time the house was bought: $800,000 in 2004. It is now worth maybe $1.4 million. Is he correct when he sites the M-M Rule that I am a half owner of the $600,000 appreciation even though almost none of the money to pay for the house came from me. Should I divorce my wife, the lawyer believes that it being a gift and our years of living in it rent and mortgage free proves that it's community property under the M-M Rule. By the way, we live in California. Is this lawyer right? Please let me know.