Legal Question in Real Estate Law in California

Re: Is wife entiteled to $ for home she owned before marriage

When your wife owned her own home, it was her separate property. When she put you on the title, arguably it was a transmutation to community property, depending on how you took title.

I am assuming that you purchased a new house using proceeds from the sale of the old house. You do not provide any factual basis explaining how you took title to the new house. I am assuming that your new home is also community property, unless there has been another transmutation.

There is nothing to divide for the old house, because it is sold. You would divide your community property 50 50 unless one of you acted inequitably, or an adjustment needed to be made for reimbursement.

Very truly yours,

Re: Is wife entiteled to $ for home she owned before marriage

There is a formula; it is not found in any statute, but rather has been developed and applied by judges as "case law." A couple of the leading cases are In re Marriage of Marsden and IRMO Moore, so I think the formula or set of legal rules established by these precedents is callen the Marsden/Moore formula.

Using the formula is within the usual practice of family law attorneys, not usually real estate lawyers, even though it concerns real estate. Since the use of the formula becomes rather complicated (the percentage community property and the percentage separate property depends upon when community funds were used to pay for equity through mortgage payments, how much and when market appreciation occurred, and other factors), use of a computer program to process the data is very useful, perhaps almost necessary.

Family-law (divorce) lawyers have a program called DissoMaster or something like that, or a competing program, that handles the computation of the separate and community shares, applying the Marsden/Moore formula to the couple's data.

Of course, in a negotiated marital settlement agreement, the parties are free to present the court with whatever split they can agree upon, notwithstanding the formula. Use of the formula is required only when the parties can't agree. So, "whatever feels right" to both is also a possible solution.

The wife's share cannot be less than 50%, i.e., the husband will not have more than a 50% interest, but her share will be less than 100%. My guess is the wife's share will be around 65%, but that's only a guess and proper application of Marsden/Moore might give a figure anywhere between 80% and 55% depending on a fairly long list of dollar and timing factors.

My advice is, even though you seem to be doing your own divorce, see if you can find a divorce lawyer who will run your numbers for a small fee.

Re: Is wife entiteled to $ for home she owned before marriage

After reading Mr. Roach's answer, I think I need to supplement mine. It is indeed possible that by putting you on title 18 or so years ago, your wife made you a gift of a half interest in the home, and thereby transmuted the home into 100% community property. If that were so, forget the Marsden/Moore formula; the current house is also owned 50-50. However, facts such as your shared belief that "she is entitled to something" points to the probability that no gift was intended, and that the title change and mortgage change back then were for sake of financing ease and convenience, and there was no express, conscious intent to make a gift of the equity to the community. This again is an area where a family law attorney could give you a better opinion of whether a court would treat the 18-years-ago transaction as a transmutation of ownership via gift or just a financing tool or the like.