Legal Question in Family Law in New York

Re: Marital Property

Under NYS law, property you own before marriage is, of course, your own separate property -- not marital property.

If you then marry, and after marriage you take out a home equity loan IN YOUR OWN NAME on that property, your spouse could claim that any MARITAL funds you use to pay back the home equity loan (or, for that matter, to pay off the original mortgage on the property) entitle your spouse to recoup his/her share of those marital funds. It is even possible in some cases that a court could award your spouse a share of the property itself.

If your goal is to ensure that the property remains yours even after marriage, you should 1)make ALL payments on both the first and the second mortgages from a separate (non-marital) account, and 2)create a pre-nuptial agreement -- or, if you're already married, a post-nuptial agreement -- clarifying your and your (intended?) spouse's current and future interests in the property.

Re: Marital Property

To the extent that you use marital funds to pay the second mortgage, your spouse could argue that the house is now marital- however, he may only be entitled to the appreciation on the asset. I note that this is a second mortgage- how is the first mortgage paid?

Daniel Clement

Re: Marital Property

This is a case where you could transform a 'personal' asset into a 'marital' asset by using common funds to pay off the loan.

There are two ways to avoid this problem: have your current or prospective spouse abjure all interest in the property. This is almost 100% effective if this 'pre-nuptual agreement' is made before the marriage, but can still work if it is made during the marriage.

(2) Make sure that you pay off the loan through non-marital funds. This may be difficult, but I have some ideas.

You are welcome to a consultation for no fee.