Legal Question in Family Law in California
If I sell a house I owned before marriage and use that money as a down payment to buy a new house that has both me and my wife on the deed, and we later get divorced, will I still be entitled to the money I used from my first home as a down payment?
1 Answer from Attorneys
Your question is more complicated than it may seem to you, unless you owned the house before marriage free and clear, or it was a rental with positive cash flow at all times and that you never put any money into. If, like most people, you paid a mortgage or otherwise put money into a house after you were married that you bought before you were married, your spouse already has some claim on it. So the first step is figuring out what interest the community has in the house you own. That interest would roll over into the new house no matter what. As for your remaining separate property interest, if you just sell the current house and buy another as husband and wife it will depend on how you take title and what other things you do at the time of purchase. Spouses generally take title either as "husband and wife" which is essentially the same as saying "community property" which creates an irrebuttable presumption that you have transmuted your separate property into community property, or as joint tenants, which creates a rebuttable presumption of intent to make it community property. If you want to preserve the separate property character of your down payment contribution, you will need an express agreement that you are not contributing the down payment to the marital community, and specifying whether you both intend that only the cash amount you put in remains separate property, the cash amount with interest, or that you are acquiring a percentage of the property as separate property equal to the percentage of the cash you put in as to the total purchase price, which would make the separate property interest grow as the property increases in value.