kindly anyone provide some information on how the Moore/Marsden interest is calculated.
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kindly anyone provide some information on how the Moore/Marsden interest is calculated.
Hi MMR,
A Moore Marsden situation comes up when one of the spouses has a property belonging to him/her before marriage and has been paying regularly mortgage amounts.
After the marriage the other spouse also makes contributions towards payment of the mortgage thus making the other spouse eligible for a share of the interest in the property according to the Moore Marsden rule at the time of divorce.
The calculation under this rule specifies exactly how much the other spouse will be getting.
Thanks
James
Hi,
This following formula is used to determine the community and separate property interest that each of the spouses is entitled to get if there are contribution made by a spouse towards liability payments of a separate property.
[b:a7c1215ffd]CP = PPCP + (CP% x MApp)[/b:a7c1215ffd]
[b:a7c1215ffd]CP[/b:a7c1215ffd]: community property
[b:a7c1215ffd]PPCP[/b:a7c1215ffd]: principal payments from community property
[b:a7c1215ffd]CP%[/b:a7c1215ffd]: community property percentage = PPCP / Purchase Price
[b:a7c1215ffd]MApp[/b:a7c1215ffd]: appreciation during marriage
[b:a7c1215ffd]SP = DP + PPSP + Pre-MApp + (SP% x MApp)[/b:a7c1215ffd]
[b:a7c1215ffd]SP[/b:a7c1215ffd]: separate property
[b:a7c1215ffd]DP[/b:a7c1215ffd]: down payment
[b:a7c1215ffd]PPSP[/b:a7c1215ffd]: principal payments from separate property
[b:a7c1215ffd]Pre-MApp[/b:a7c1215ffd]: premarriage appreciation
[b:a7c1215ffd]SP%[/b:a7c1215ffd]: separate property percentage = 100% - PPCP / Purchase Price
Please let me know if you have any other doubt.
Thanks
Colin
Hi Guest,
Under the laws in California, when a couple gets a divorce, the court divides the community property into half and distributes each half to each partner. This implies that if a person owns a property prior to getting married, he can retain his separate property even after the divorce. But the rule differs in case of certain exceptions; for example, you can combine your assets and can create an asset community property.
Now, you may make a down payment on a piece of real property using separate property funds before marriage. But during your marriage you may make mortgage payments from your community funds. In that case, your spouse will have a community interest in that property. This interest is known as Moore Marsden interest. The interest is calculated on the basis of the principal loan amount paid from the community funds. You will however get back an amount equal to the down payment made from the separate property funds.
Thanks,
Caron.
I'm still a but confused on how to calculate this. How do you come up with the CP%
Welcome Denise.
The CP% denotes what percentage of the purchase price of property is the total payment made by both spouses for the community property.
CP% = PPCP / Purchase Price, where PPCP = payments towards the principal loan balance by the owners of community property, that is, property owned by both spouses from the beginning of marriage till the date of separation. It does not matter if only one spouse have earned all property or assets before marriage.
After marriage, both husband and wife own the property equally without any regard to who actually purchased it.
Thanks.
OK, now next question. What happens to the equity of the property after marriage when both spouses are contributing to it? ie: At time of marriage our house was worth $180,000.00. It is now worth ~$460,000.00. What would I be entitled to of the equity?
Hi Denise,
You will be entitled to half of the current equity in your home as per the rules of the community property state. By the way, what's your state of residence? I guess it is community property state too. Otherwise, the rule won't apply.
What I mean by saying that you are entitled to half of the equity is that, if the property is sold off, you will get the price of half the equity in your home.
Thanks,
Sara
Thank you Sara. I live in California. My ex to be bought the house in 1994. We have lived together & I have contributed to the home since 2000. We were married in 2001. He refinanced in 2004, but did not put me on the deed. The current plan is to buy him out so he can move out of state. He says I am only entitled to 1% per Moore-Marsden. That just doesn't sound right to me.
Thanks,
Denise
Hi Denise,
Welcome back.
I think it will be better if you can calculate the community property interest from the Moore Marsden formulae given above. Then divide the total interest by 2. This will give your share of interest in the property.
It is better to verify for yourself as it concerns your part of ownership interest.
Thanks,
Sara
My wife is on script drugs and is out of control i was injured by her ex not putting lugs on tight, just out backsurjury and her abuse 2 my 2yr an i too much..!!!3yrs /ins to pay soon many $ help
Anonymous,
What exactly are you looking for? pls exlplain.
been married 3 yrs i heard that 4 th year cut off for having to pay alimoney new mrs 2wks after wed flips on ways 2more wks is pregnant and six mo later i almost die in auto and bankrupts me when im disabled pays miss accounts w/new mrs cards my credits shot/thank god for surjury im geting well 200k in debt pay her off w/settlement 25/75 50/50 ? what is she entitled to i rent now /her addict behavior has caused death to our marriage i try to just protect my daughter 2yrs she will buy alot of drugs with a share an i heard that if spouce is on drugs they will lose shares /so if im getting 100k what might i have to give her
The situation you are in my suggestion would be to contact an attorney and get legal advice. As she is used to drugs you can get legal advantage while decision is made on alimony payments.
Does cost of improvements have any factor in the Moore-Marsden calculation. We made over $15,000 in improvements/remodeling to my Ex2B's house. Also, he is trying to tell me that the $23,000 more that he put into his 401K can either be paid to me as $7,000 now instead of filing for a Qualified Domestic Relations Order. Can it be reduced that much by having him pay it up front; not having to deal with it later?
Hi Denise,
It include the home improvement cost as a factor in the Moore-Marsden calculation provided the improvement can increase the home value appreciably.
My husband bought the house before we were married and then married 5 months later. We have been living in the house for 6 years. My name was not on the deed at the time but I do think it was at one time before refinancing but is not currently on it. My lawyer used the moore/marsden calculation and it appears i will only be getting 6% allocation of equity. Does this seem right?
Hi Stella,
Did your lawyer work out the equity in community property based on the formula:
CP = PPCP + (CP% x MApp)
Where,
CP = community property
PPCP = principal payments from community property
CP% = percentage of community property = PPCP / Purchase Price
MApp = property appreciation during marriage
To know more on the calculation that your lawyer may have used, please refer to:
http://www.mortgagefit.com/know-how/mooremarsdenrule.html
Yes, that formula was used. Is it possible there is some loop hole here? It doesn't seem fair. I lived, maintained and made payments toward the mortagage only to receive 6%
Before marrying I had purchased a home. The title and loan was in my name the whole 14 years of marriage. I can prove that I made all the payments and paid utlities out of my seperate checking account. Is he entitled to any equity in the home?
Hi Darlene,
Welcome to the forum.
As you have bought the home before your marriage and made all the payments your husband does not have any right on the property.
Best of luck,
Larry
Darlene,
A similar has been answered at http://www.mortgagefit.com/equity/entitled-afterdivorce.html . Please have a look.
My ex-2be bought the house un 1995. We got married in 1999 and separated in Aug. 2007. I was not in the deed for the first 4 years until we [url=http://www.mortgagefit.com/refinance.html]refinance[/url] at that time I was added to the deed. Will yout tell me the percentage that I am entitled to.
Thanks.
Welcome jengee.
It will depend on the deed how it was prepared and the amount of equity on the property. Are you selling the property? You should talk with an attorney. If you sell the property then you should get your share of the home equity but if the sale proceeds don't cover the loan amount then you will be responsible to pay off the lender.
We live in california. Prior to our marriage, my wife owned a house. After 20 years the house has considerable capital gains. Does the capital gains become community property?
Welcome Bob.
As your wife owns the property before the marriage the property will not be considered as community property. So if there is any loss for this property she will responsible for it. Likewise she will be responsible for the capital also.
Let me know if you have further queries.
I purchased my home in 1981 for $175 and did $40 in improvements. In 1987 I married. In January of 2000 we took out a loan for $100,000 and in February my husband told me he was leaving but did not moved out until October 2000. I continued to make all the payments on the house and was required to pay alimony. We have still not divorced.
My question is, if the house was valued at $525,000 in October 2000 and was sold for $860,000 in June 2007 is my husband entitled to any of the increase in value between the date he moved out and the date the property was sold?
Welcome Ayla.
Is your husband also on the deed? If he is on the deed then he will be entitled to the capital gain after selling the property. But if he is not added on the deed then he will get it. Because you have bought the property before your marriage and it will not be considered as a community property.
Let me know if you have any further queries.
I put down 230k on a home. The home was purchased for 407k now after a dismal market. It is worth 450k max (it was 760k) we refinanced serveral times mostly to pay off cc debt but 50 k went for a pool. Well now we are getting divorced and owe 420k after realestate fees I do not see much left. I think if I kept the house shouldnt I be able to keep it scot free with no liabilities to her in fact I think she would be responsible for the eq line of credit for 50k (at least 25 of it) How does this law affect that ?
Thanks
Hi Paulyb,
Did your spouse have her name on the loan when you refinanced several times? did she take out the Heloc solely in her name?
Pls explain how the Moore/Marsden rule apply to my situation. In 1992 before my marriage I bought time share - paid for by my own funds but I included my boyfriend's name on deed with the agreement of him paying half. Three years later we marry but he never paid his portion now that we are divorcing his lawyer is insisting that he entitled to half of time share.
Thanks.
Hi Lorna!
If your husband has not paid any portion of the mortgage, then he does not has any right to the property. Moreover as it is a timeshare property, the sharer has no claims to ownership of the property. I think it will be better if you consult an attorney who deals with this. He/she will be able to help you with the legal proceedings of the case.
Hello I purchased a property for $500,000 and made a down payment of $350,000, then spent 150,000 on improvements. Five years later I married and the property became community, at that time the prenuptual allowed me $1,750,000, as my seperate property on any disolution. During the marriage we paid off from community funds the balance of the oustanding loan in the sum of $111,000. We believe the appraised value of the house will be $4,500,000, which my wife will keep.
My question is; on buying me out what would be net to me based on the above and my tax liability, thanks Rod
Hi Rod !
Welcome to the Forums!
If your spouse is buying you out, then there will be no tax liability on your part.
Sussane
Person buys home for 260K.... One year later marries me..... Refi's property several times but never adds me to the deed as I quit claim so she gets better rate on loans..... Community money pays mortgage for 7 years ..... Now divorcing. Do I get any interest in property or what??? Thanks and love your web site.
If you have quitclaimed the property to your spouse, then you will not get anything from the property. Moreover the property was purchased before marriage, so I don't think it will come under community property.
My home was worth $160,000 there was a $44,000 I owned. We refinanced and now the mortgage is for $200.00. It is probably worth $450, 000. What will my husband get he is being so nasty because he is in love with another women and I have two young children. Thank you if someone can help.
Hi monic!
What does your husband want you to do? Does he want you to quitclaim the property in his name or is the property is both of yours name? If will be better if you could give us some more details.
Thanks,
Jerry
hubby had condo before we married. Then after we married we lived there for 5 years both of us paid the mortgage. He had me sign an interspousal grant deed when we sold it and we used all its proceeds on our current home. Is current home with both our names on it considered 50-50 for community prop in CA?
Hi madonna!
I think both of you will have a 50-50 ownership in the property in CA. But to be on the safer side you should consult an attorney and check with him.
Thanks.
My husband owned property before we were married. Our plan was to demolish the house (it wasn't liveable) and build a new duplex. After we married, we demolished the house, prepared the land and built the house, including new slab, plumbing, utilities, sewer...nothing was used from previous house, just the land. Will this be considered co-mingled? Am I just entitled to 1/2 equity of improvements? I live in Louisiana
Hi CajunQn!
If money from the community funds were used while demolishing or raising the house, then the property has now become co-mingled and you can get 1/2 equity of improvements. If the community funds were not used, then I don't think are entitled to get anything.
Thanks.
Acutally, we obtained a loan 1 year before we were married and we BOTH paid on that. Demolition and new construction started 4 months after we were married. From what I have been reading, it appears that I am entitled to 1/2 of the equity increase. The old house/land was worth approx 75K-100k, with the addition of the new duplex, we are now valued at over 700K. My soon to be ex, doesn't think I am entitled to anything since it was his property before even though, we have always paid the loans 50/50.
Hi cajunqn!
If you have paid the loans and if you are living in a community property state, then I think you are entitled to get some portions of the equity. You should immediately take some legal help to decide what will be your next steps.
Thanks,
Jerry
Ok- I'm getting divorced and just got a huge shock on the settlement proposal. Please tell me she's wrong..
I became engaged in 1997 and we bought a house ($220k). My wife put down 22k for a down payment and we got a $198k loan.
In 1998 we got married.
In 2002 we refinanced the house and it appraised for $400k. The loan amount was paid down to $183,674 by that time and we added my name to the title. Originally we kept it off because my credit score would adversely affect our loan. By 2002 my credit score was in the 700's.
My wife's attorney is doing the following calculation:
$400,000 (refi apprasial)
-183,674 (which they say is my M/M amount)
________
$216,326 (she say's this is separate property amount), I think the marital community aquired a 9.63% of this amount.
In 2004 we sold the house for $520,000 a difference of $120k in appriciated value that each of us have a $60k interest in.
The same month we sold our house in 2004 we purchased our dream house for 760,000k.
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.
Can this be??
If she put 22k down on our original house in 1997 and in 1998 we got married, and 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.
I have been reading Family Code 2640 and that appears to be what that section says. Please help!
There was also a section of the calculation, which was handwritten that said:
$216,326 (wife's s/p) minus my m/m amount (Oct 1998 thru Sept 2002)
half of the principal=15k divided by 2 = $7500 divided by $216,000=3.5%
at 3.5% the M/M amount =$6,300
House sold in 8/04 for $520,000 = 120,000 divided by 2= 60k
$216k minus 60k = 210k plus her 60k = $270k
We were married for 9 years and lived in our original house for 1 year before marriage. in that time period we both paid for the house and general expenses. 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.
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:a27c638ee3] “In 2002 we refinanced the house and it appraised for $400k.â€[/quote:a27c638ee3]
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:a27c638ee3]“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.â€[/quote:a27c638ee3]
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:a27c638ee3] “…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.â€
[/quote:a27c638ee3]
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:a27c638ee3]“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.â€[/quote:a27c638ee3]
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.
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!!!!
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.
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!!!!!
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
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?