Paid rent in a separation/divorce

In My Humble Opinion
1

Found out at the family Christmas my B-I-L (wife’s brother) is separated from his wife and has been so for about 6 months. She wasn’t there at Thanksgiving, but due to her working a rotating shift he said she was working, which was true. Kids are split between households and he thinks they are getting back together sometime, talking to their oldest and some snooping on social media and other sources (she changed her address) we doubt it.

So as of now he is making the house payments (he admitted this) and other costs for upkeep and maintenance, lets say $1000.00 a month. She is paying $1000.00 a month to rent a 3 bedroom house. If (and when) they get a divorce, lets say 2 years from when they separated he has paid $24,000.00 dollars in house payments, upkeep, taxes, etc… for “their” house. She has paid $24,000.00 in rent. She has a claim to half the house, does he have a claim to her rental costs? Can he say I deduct $24,000.00 from your share because you choose to rent while I put that money into the house? I know it will be more complicated than that but we think he is getting hosed by her and what she is paying for rent while he pays for the house.

2

In this Netflix show about about Betty Broderick getting divorced and then murdering her ex-husband, they mentioned that the date of separation was the date at which asset values mattered for the divorce. So if they split on 7/1/21, that’s the date at which the asset value of the marriage would matter for the divorce settlement. If she spends $24k on rent, that is money she is taking from those assets and would be reduced from her split of the assets. I’m not sure how the $24k in house payments would be factored in. If the house payments are being made from a shared account, then it may not matter. The shared money is being used to pay for a shared asset which is going to be split in the divorce anyway. But if he is paying for the house from his personal account, then the $24k in house payments would be reflected in his share of the split. He would get $24k more of the assets if he used his own money. But this stuff is going to depend heavily on which state they are in and a lot of other factors. He needs to talk to a local attorney if he’s worried about getting hosed.

3

Not to be flip, but this is what lawyers are for. A consultation is relatively cheap. And as @filmore says, these matters can vary widely based on location and the specific details of their circumstances.

4

He’s not worried about getting hosed, we are. He thinks they are getting back together and she may be leading him on. She has a track record from a previous marriage, no kids, but defiantly took the ex-husband to the cleaners.

5

He stayed in the family home and she moved out to an apartment? How is he getting hosed? She’s paying rent and getting no benefit of the family home.

6

He’s paying thousands of dollars to maintain THIER home that she can theoretically recover 1/2 of what he is paying, she is paying thousands in rent that is gone with him having no claim to. In my scenario she could get $12,000.00 in value that he is spending to pay for/maintain the home, he is out $24,000.00 she is paying for rent.

7

The notion of his and hers money in a marriage is not really that relevant from a legal perspective. It’s all shared money. “HIS” money that he’s putting into the house may not really be his money. If it’s coming from a shared account, it’s the marriage’s money and each person is entitled to half. Since they are separated, they can create accounts such that there really is his and hers money. What he should do is setup a new bank account for himself and have his income sent to that. Pay for shared expenses (like the mortgage) from the joint account, but his expenses should come from his account. That makes it clear that his income is different than her income. If she’s taking rent money from a shared bank account that he’s depositing his paycheck into, the court may just look at it as a shared expense and not really care whose money is whose. Setting up his own bank account is a relatively simple and easy step which can save him a lot of money if they end up getting divorced.

8

This makes little sense. Suppose they did have separate bank accounts that were somehow excluded from the subsequent divorce settlement. Out of their own funds, each of them is paying the same amount, and each gets the use of a similar property to live in, until the house is eventually sold and they split the proceeds. How is that not equitable?

9

  1. $12k in mortgage payments will not equal $12k rise in equity. Some of that is mortgage interest. On the other hand, the house may well increase by more than $12k in value over that time frame. There may also be significant expenses in that time period, and if so they will have to decide who pays what for them.

  2. Living in the family home is much better than living in an apartment. They aren’t getting the same thing.

  3. Legally, they are still an economic unit, making this decision together. It’s still all “their” money.

10

The OP assumption was that the amount the husband is paying for mortgage & maintenance of the house is exactly equal to what the wife is paying in rent. That being so, I don’t see how any of the above is relevant. If they are each paying the same amount and each getting a place to live until the property is sold and split, that’s equitable.

Agreed, but OP was claiming the husband is getting screwed here.

Also agreed. In which case the whole thing is moot anyway. But even in a hypothetical where their expenses are coming from separate sources of funds that are excluded from the settlement, it still seems equitable to me.

11

As I understand it, this is his claim: she pays $12k out of shared money, they both lose that $12k. He pays $12k on the mortgage, eventually they sell the house, make it back, she gets half, so she gets $6k of the money he spent.

What I am saying is that paying 12k in mortgage payments likely won’t reduce the principle on the mortgage by 12k, because someone portion of those payments are interest. So the money they “get back” isn’t equal to what whatever he’s paying now.

12

And I’m saying all of that is irrelevant, because it’s the wrong way to look at it. All that matters is what they are paying and what benefit they are receiving. They are each paying the same, and I assume all from joint accounts anyway. They are each receiving the same short term benefit of a place to live. And whatever eventually happens to the value of the house net of the mortgage balance, they will split it. All of these elements are equal.

All that has happened here is that they have the additional shared expense of a rented apartment that they did not need before. But that’s normal in a separation until the primary residence is sold.

13

I agree, but wanted to point out that even using the OPS own logic, the math doesn’t work.

14

There are a lot of odd assumptions from various people here. I don’t have the answer, but I am living a similar situation myself right now, so I can add some information.

First: yes lawyer consultations are free and easy to get (I’ve had several). However, you’ll receive limited answers from the lawyer. They will answer questions on what the law says, but they won’t give you any advice on what to do in order to get or prevent X,Y, or Z. In order to get you advise you need to hire them and become their client. And remember; you don’t know that your spouse didn’t receive their own free consultation from this same lawyer the day before. They are great when you don’t understand the system or the law, and also for determining whether you want to hire this particular lawyer (which you’ll probably want to do eventually). But the free consult is unlikely to completely solve your situation.

Second a couple that separates and doesn’t terminate or stop using joint accounts is odd to me. A lot of separations are over money, or if not then money quickly becomes very important. The first thing I did was open my own bank account. Who’s income is who’s is usually pretty clear.

So in our case, we are both on title of the “family” home, but she decided to leave and rent her own place. She signed over occupation of the house to me… basically meaning I get to live here, she has no right to come in and out and take stuff. It’s my place to live, but yes she’s still on title. When we originally signed the mortgage agreement, we committed to the bank that we were both responsible to pay the mortgage. Our later separating doesn’t change that the bank gets their money from one, the other, or both of us.

From there it’s not completely straight forward. She basically decided to sign an agreement to pay for a joint asset, then walked away from that agreement and payed nothing towards it. If I want to prevent the bank from taking the house, I have to pay 100% of the mortgage. In my mind if you want to forfeit on your payments, fine. Let the other person decide if they want to try and cover it themselves. But don’t expect to reap the reward of their paying the joint debt off years later and then coming back for “your cut” of the other person’s decades-long investment.

I told my lawyer that’s she’s responsible for and should be paying half the mortgage. I’ll cover all the utilities etc because I live there. Complication: Where I am there’s a term (can’t remember it off the top of my head) where when one co-owner no longer lives in a house, they can apply for (if they meet certain conditions) something which basically means I need to pay her out for her half of the house she no longer uses because in theory I could be renting it out and making money (a ridiculous assumption that you can actually rent out half a house to another family who can only use the bedrooms every other week when my children come live with me). But, legal I guess. That theoretical rental income I’m getting would essentially cover her half of the mortgage payments. So fine, she doesn’t have to pay her half every month; I’m paying her out every mortgage payment.

But, the question then is later when the house is sold, is she still entitled to 50% of the proceeds? It seems to me that I’ll have already paid her out monthly for her share. Say I paid off a $300,000 mortgage over the years by myself. Her mortgage payments got covered by me over that time span. Why should she then get half the final proceeds which she A) didn’t contribute anything towards, and B) has already been paid out? To me that’s clear-cut double dipping. I’d be forced to pay the bank $300,000 + her $150,000 = $450,000… for a house that’s only worth $300,000 in the first place. So if it worked out that way I’d have to pay a $150,000 penalty for taking over a joint debt; she’d get her half, plus be given my half and unjustly rewarded for deciding to walk away from her legal obligation to the bank.

I think the OP is wondering about a situation like that. And sadly I can’t get an answer out of my lawyer. Too many “it depends” clauses.

15

I think usually the asset division is finalized in the divorce. Are y’all planning on staying married but separated for decades?

16

In my case no; definitely divorcing and this all would have been done by now except Covid shut the courts down to essential cases-only 2 months before we were ready to finish it. Our case is more complex but I just pulled the “jointly owned house but only 1 person pays for it” portion out to shed some light (or maybe shadows) here.

I’m hoping to have one of our asset division conditions as her taking her name off the house now and avoid this whole question 20 from now (yes I can afford to qualify for the payments on my own; she made no money at the time we jointly qualified). It should help that the property value has actually dropped below the original purchase price and the place is worth less than we (I) paid for it 3 years ago. Technically she should be paying me out to take her name off the house which is worth -$7,000 right now.