Divorce and splitting up a home

In My Humble Opinion
1

First and foremost, I’m not getting divorced, I’m not even married, this is just a question that’s been nagging me. When my ex-wife and I split up I got lucky and she (leaving the details out) told me I could keep the house.

My question is, if you own a house for a while, get married then a few years later get divorced, how is the house split?

For example. Lets say you buy a house for $200,000. You pay it down to $150,000. Get married. While married you pay it down to $100,000 and that’s when you get divorced. The house, (play along) is still valued at $200,000 and someone should be handing the other person $100,000 to stay in that house or, in some cases) it would be sold and each party would be given $100,000 to walk away.
However, you paid $50,000 on your own and $50,000 while married. It seems to me that you should get back your original $50k and the other $50k would be split.
IOW, I should be able to buy out my ex for $25k or she should be able to buy me out for $75k. OR, the house could be sold, I get 75k and she gets 25k (and the bank would get 100k)

That’s what seems fair. However, when I got married, we didn’t, that I can recall, have to disclose all the stuff we entered the marriage with.*

Is this where a prenup comes in? Is this where I go to my soon to be wife and say 'I’ve paid this house down by $50k, if we get divorced, either I get the first 50k back and we split the rest OR you can buy me out for 50K plus half of whatever is paid down while we were married"?

And, again, for the sake of the question, let’s assume what you pay for the house is the same price that it appraises and/or sells at later on, it’s just easier that way.

Like I said, this is just something that’s nagging me, especially as I pay extra on my mortgage each month. I have a business that I may inherit some day and that’s probably reason enough to get a prenup, but already having 25%+ of my house paid, I’d hate to lose that.

It seems like one ‘trick’ would be to (quietly) have the house appraised and keep a mortgage statement from right before the marraige. That way, should you get divorced, it’s easily proved how much the house was worth and how much was owed on it at that time. Perhaps even make sure you have the original loan documents in that same area to show how much you paid down.

So TLDR, I always hear that you split what you aquired during the marriage, how does that work with a house loan which you may ‘acquire’ both before AND during the a marriage
.
*FTR, I’ve always thought that would be a good idea. When you fill out your marriage application (with the county), list all things, negative or positive, worth over some certain amount, say $5000. So things like credit card debt, bank/savings/brokerage accounts, houses, cars etc, expensive furniture or jewelry, etc. Especially in this day and age of so many marriages ending in divorce, and least the big things that each party entered into the marriage would be on paper and could be subtracted out before splitting the rest of the belongings…perhaps if a certain amount of time has elapsed that gets ignored…it’s just a thought. It just seems like it would be so easy for one person to say ‘that $3000 leather couch, HA, you bought that while we were married (unless you can prove otherwise)!’.

2

I’m not sure your assumption is correct. In any event, this varies from state to state. Also, it could depend on the length of the marriage. My last divorce was in Washington state. We agreed to divide everything approximately evenly, regardless of who brought what into the marriage to start. Washington is a community property state, and I think the presumption is that all assets become community property unless there is an express agreement to keep some assets (like your equity in the house) as separate property. In my case, I had to pay my ex the “her half” of the equity in the house I wanted to stay in. She is obligated to pay me half of her equity when she sells her house (acquired during the marriage).

Thus, although I’m not a divorce lawyer (just a lawyer who’s been divorced), I don’t think your “trick” would necessarily work. I’m sure you could accomplish what you seek to do by agreement, but I’m not sure you can get their by “quietly” have the house assessed.

Others may have better insight.

3

Wisconsin (my state) is also a community property state. Let’s assume that during the marriage the house was never refi’s so it’ only owned by me, my name is the only own on the deed and mortgage. We can also assume, if it makes a difference that when we got married it WAS refi’d, so 50K was paid by me alone and 50k was paid by ‘us’.
FTR, community property [states] means that things acquired, while married, are split evenly, which is why I ask this question. A house that was acquired before the marriage, paid down, then continued to be paid down after the marriage seems like it might present a problem…Seems like, there’s probably a protocol, it’s not like it never happens.

‘Trick’ and ‘quietly’ might have been a bad choice of words, I was just saying that as a single person, I could get the house assessed and keep a copy of a bank statement with my fiance knowing it. It’s not like that would be difficult.

4

I went through this. I owned a home, I was married for 5 years to a woman and my exwife lived in the home. Thankfully was had a recession during my 5 year marriage and the house didn’t go up much. I had to pay her 25% of the amount it increased during our marriage. In other words she got credit for 1/2 of my 1/2.

5

I had a friend that went through an ugly divorce. When they split up he offered her (say) 500,000 for (one of the) houses. She balked at that saying ‘500k, there’s a 100k just in pillows in that house’. Being mad at her AND a savvy business man, he put the house on the market (in a recession) and split the money with her. It sold for something like 450k. If she kept her mouth shut she would have walked away with a lot more. I think she thought it would sell for over a million, but he knew it wouldn’t.
As Jim Cramer says, [bulls make money, bears make money] pigs get slaughtered.

6

See
(3 pages)

7

In New York you divide property acquired during the marriage. How the property is divided is based on around fourteen factors that are listed in a statute. The most important factor is the length of the marriage. If the marriage is over 10 years, then the house will most likely be evenly divided.

In the OP’s example, where the guy has a $200,000 house once he gets married, and the house stays $200,000 when he gets divorced, he would keep the entire value of the house because it was acquired before he got married.

The law gets more complicated if the value of the house goes up during the marriage and I’ll just note that the spouse might be entitled to the increase in value under certain circumstances.

The best way to protect your assets when you get married varies from state to state. In New York, you need a prenup if you do not want your assets divided evenly when you get divorced. Even if most of the property is acquired before the marriage and shouldn’t be divided, it’s better to have a prenup spell it out for everyone rather than relying on the Judge you get in court.

8

When my husband and I separated, we tried to sell the house and had 2 offers fall through. If we had been able to sell the house, there would have been about $2,000 left over. So I gave my ex $1,000 and had him sign a document that he gave up any right to further compensation, and I got the house.

9

I guess what this comes down to, now that I think about it is, that I wish/think there should be some kind of standard prenup you register with the county before entering into a marriage.
Without giving it much thought, I’m thinking it would be something like
1)You MUST list all assets/debts greater than (say) $5000.
1a) For items you make payments on, a reasonable assessment and amount owed owned would be listed (this could be as simple as a your last tax statement/bluebook value and your most recent bill).
2)We recommend you list assets/debts over $1000 (this would avoid things like “I brought that couch before we were married”/“No my mom gave it to us”…well work it out before hand
3)The entire document (maybe) becomes null and void after some amount of time, 10 years maybe.
4)A credit report would be pulled to do this so the county person that oversees this can make sure everything (or at least debts) are on the up and up. This is all, at least slightly similar, to things I had to list on my divorce paperwork.
5)There would be a charge for this, Maybe $200? No point in charging the tax payers for it.

I’m sure divorce lawyers would fight against it, and in in this day and age it’s probably some how racists or sexist or something, but I’m just thinking it would help keep at least some messy divorces a bit cleaner and maybe help those 23 year olds that make $30k a year from having to hire expensive lawyers because the big stuff they’re fighting over (cars, house, credit card debt) would be in black and white and not have to be argued in paper. When you say ‘first we subtract this, then we split the rest’ suddenly there’s not as much to fight over.

I sorta kinda understand prenups and I think this is a bit different.

But, like I said, this stems from my house. I’m over paying on my mortgage each month and I’d hate to lose half my house when I was paying extra on it. Sometimes I wonder if I’m better off tossing the extra money in a savings account until I get married someday, know it’s ‘forever’ then make a giant payment, just to avoid a situation like that.
Basically, when I got divorced I had to give the county my ‘balance statement’ (for lack of a better word’. This would be giving them the same exact thing before hand. The difference between the two is what gets split.
That seems fair to me.

10

If you are 23 and making $30k a year, you don’t generally have a positive net worth. Divorce doesn’t clear you of obligations to pay your bills - if you both signed the car loan and he gets the car, you are still responsible for the loan if he defaults.

(This bit my ex-husband - I got the car and the car loan, which I paid off. I also got the house and paid the mortgage, but he remained on the mortgage until I refi’d years later. So for years, he couldn’t get a mortgage because his income was not high enough to cover a new one and the one he already had.)

Although I agree with what you are saying. As part of the process of marriage, a full disclosure of each persons financial position should be made and recorded. I wouldn’t legislate it, but it would perhaps give a few people pause when they say “$30k in credit card debt?! Maybe I don’t want to legally hitch myself to your wagon until you take care of that.”

11

But in my scenario, I’m saying that the car loan was signed before the marriage. Though, it seems like even though the car loan (or house loan) was paid down during the marriage, if the asset would still go to the person who ‘bought’ it before hand.

Bit my ex-wife as well. When we split up, I refi’d my house, but not my HELOC. I tried to, but doing so was going to significantly raise the rate on it, because that’s where the rates where at the time (it was going to go from (off the top of my head) 4% to 6%…so I just didn’t and left both of our names on it, knowing she wouldn’t know I left it alone. It wasn’t until she tried to buy a house a few years later that she called me on it. At that time I had enough cash to pay it off, which I did.

I’ve heard it said that each person should request a credit report from their future spouse before they get married just so they can see these things. That way you don’t end up owing their debt (especially if things go sideways). But when you get divorced, at least in Wisconsin, you give the court a financial statement so the judge can make sure that the way you divided things up is, at least, somewhat fair. I don’t think it would be an awful idea to require this before hand as well. Not so that a county worker can say ‘y’all sure about this, he owe like 45 grand on his Visa’, but moreso that if you get divorced in a few years, and he ownes 50 grand, you’re only splitting the 5 grand if he doesn’t take responsibility for it. I think, and I could be wrong, that by law the courts could split that and even thought 45 of the 50 grand was racked up before the marriage, they could force you to split the entire thing.

OTOH, I could see credit card companies fighting this tooth and nail. In Wisconsin, a spouse is legally required to pay all debts that that the other spouse racks up if they don’t pay it (whether they die or for any other reason they choose not to pay it). Something like this could give you the ability to say ‘I have proof that it’s not my debt, go find him’. But since this is hypothetical, who knows how that would play out.
Also, I don’t know if this applies to divorced couples. That is, if my, at the time, wife racks up a ton of credit card debt, we get divorced, then she defaults on the payments, I don’t know if they can come after me.

It just seems to me, that a financial statement, required upon divorce wouldn’t be a terrible idea upon getting married as well.

The accountant in me says this is a good idea, the liberal in me says this is a good idea. The logical part of me…doesn’t know.

12

Make it easy and don’t get married.

13

I thought when you got married all acquired, to that point, assets become jointly owned. Regardless of who paid for them when.

Y’know, like a partnership.

If you don’t want half your shit at risk, maybe don’t take on a partner!

(But what do I know, I’ve never been married!:))

14

Off topic I know but that’s what we keep trying to tell the gays.

15

This comment went beyond off-topic. It had no place in the thread, joking or not. This is a warning.

16

The accountant in me says its a great idea to do on your own. The liberal is horrified about government intrusion into our lives that will further burden the poor. The pragmatist says its a horrible idea to require it. When I married the first time, the $60 marriage license was a big deal - additional requirements come with additional costs. Any requirement would unduly burden the poor - the very people who don’t need this because the laws are in place to take care of the simple use cases - a car you bought before your marriage in title to you where you hold the loan is yours. What you want is honest conversations about money, not required paperwork. And you want people to change their minds as a result of those honest conversations - which anyone with a wedding dress in their closet and a bachelor party scheduled isn’t likely to do.

17

Not generally, but it varies from state to state. In some states its even possible to get significant assets as an individual when married. My brother in law divorced and had inherited, while he was married, a significant amount of money. Because they put it in a joint account and spent it jointly, it became a joint asset. But we were told that if he had put it in an account under his name only, it would have remained his asset.

18

Isnt if you just live together for more than 5 years its considered a common law marriage and it works just like a divorce?

19

But, lets be honest, people don’t have honest conversations before getting married. I’d be willing to bet that more than half of the people getting married don’t know how much their future spouse is worth (assets minus debts) or even what they owe on their house if they own one. We have a culture of just assuming things are fine unless we have a reason to think otherwise.
Not that this is the reason for bringing this up, but I’ll bet, at some point, someone has been way, way underwater with their debts and gotten hitched just in hopes of being able to skip town and get the other person to clean up the debts.

As for the money, the $200, that was just a random amount. Call it a ‘nominal fee’ whatever it would cost to cover the work being done. Maybe it’s $20, I don’t know. Getting married costs money, it’s the way it works, but you’ll probably also get it back the first time you do your taxes jointly.

My ex and I (for no particular reason) kept our credit cards and bank accounts separate, so that made things go much smoother. When we split up, she took her credit cards and bank account and I took mine (but we had to put it all down in writing, how much was there and who was going to make the payments), but there was no fighting over that.

20

There already is a standard prenup for couples getting married-- it’s written in to the laws of whatever state they are getting married in to. Why make people go through something that may not be relevant to them and may never be used?

I don’t think it’d really make any potential divorce go any smoother, as individual situations are always going to be complicated.