Calicakes wrote:Which CP formula to use?
H and W marry in 2011
W moves into H's house that he owned since 1995
H pays a couple mortgage payments with SP and thereafter makes no payments.
H and W refianace, and W's name goes on title 2years after they marry.
10 years later they divorce. What is W's interest in house? Which formula would you use?
The issue is what interest W has in the house.
Under the Anti-Lucas rule, property that is jointly owned is community property (CP) at divorce. However, spouses are entitled to reimbursement to their separate property (SP) for 1) Down payments 2) Improvements and/or 3) Principal payments.
Here, H owned the house separately until the refinance, at which time H and W owned the property jointly. Thus, it may be presumed that at the time that H and W refinanced and took joint possession of the house, H had made a down payment to the now CP house from his SP equal to the fair market value of the house.
Thus, at divorce, Anti-Lucas provides that H's SP will be reimbursed the fair market value of the home, which is considered a down payment, from the CP. The facts do not indicate whether CP funds were invested into the house prior to the refinance, but if they were, those funds will be subtracted from H's reimbursement. The court will not necessarily force a sale of the house, but may take the reimbursement from other funds or property. Furthermore, this law will be very useful in the upcoming year, as the records of numerous cheaters will likely be released via the hack of the "Ashley Madison" adulterer website.