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Ask Andrea, Esq. Your Own Question
Andrea, Esq.
Andrea, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 12554
Experience:  I have practiced law for 25 yrs. with an emphasis on real estate, business law, criminal defense and family law.
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My husband owned the house free and clear when we married.

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My husband owned the house free and clear when we married. We took a 1 and 2 mortgage on the house after we married. We are now selling the house after 14 years. The equity in house is about 225,000. He wants to put it all in our small business and I want at least half to put down on another house. He wants to rent. What do you suggest, something at closing? Do I have rights? The Heloc is in both names but the first mortgage is in is..should have been in both...they just put "and wife". But all 1 and 2 loans will be paid off at closing.Thanks

Hi, Carol and Welcome, My name is XXXXX XXXXX I will be assisting you.


It is difficult to suggest a course of action without knowing what your objectives are and what result you would like to achieve. Therefore, I will tell you what I would do if I were in your position. I am a firm believer in never putting all of one's eggs in one basket, and that is what your husband will be doing if he takes the proceeds from the sale of the house and puts it all in the business. Of course, anyone who owns a business will hope that it continues to thrive, and grow, but at the same time, must also have a "backup" plan. If your husband puts all the money in the business and you live in a rental, and there is a downturn in the economy, all your money will be in the business and there is really nothing that you could do in that situation until the economy turns and changes direction.

 

I would divide the sale proceeds from the house in three parts, not necessarily equally. I would put part of the money in the business for the reasons your husband initially intended to add money into the business. Then, I would use part of the money as a down payment on another house that I could call "ours" as opposed to "his house". Lastly, I would set part of the proceeds aside for investment, but would not touch it until I had decided on a sound, almost "fool-proof" investment, possibly buy a rental property, rent it out and have the house pay for itself through the rentals I would receive from the tenant. This would form part of my "security for the future",

 

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Please be kind enough to rate Excellent Service" so that I receive credit for assisting you, it will not cost you anything additional to give me a positive rating, and that is the only way I can receive credit, Thank you for understanding,

 

Bonus and Positive Feedback on survey is very much appreciated,

 

ANDREA

 

 

 

Andrea, Esq. and 2 other Real Estate Law Specialists are ready to help you
Customer: replied 3 years ago.


That is very good advise and my feelings also. The one question, that was not answered is that equity considered "OURS" where I can demand part of it to go into another house. Thank you again, Andrea.

Hi, Carol, Thank you for your reply,

 

The house, up to the amount your husband paid for it, is considered "non-marital property" and would belong to your husband in any divorce situation. Under Alabama law, the amount by which the non-marital property appreciated during the marriage can be claimed as "Marital Property" to which a spouse may claim an interest.

 

To illustrate this, please allow me to give you the following example:

 

Example:

 

Assume that your husband purchased the property for $100,000. At the time of the marriage, the property had a Fair Market Value of $200,000. Let us also assume that today, the property has a Fair Market Value of $250,000.

 

The first $200,000 is considered "Non-marital Property; the $50,000, the amount by which the property appreciated during the marriage is considered "Marital Property" to which you may claim an interest. But, even though the $50,000 is considered "Marital Property", it is not divisible while the parties are married. In other words, the law requires that a spouse be involved in Divorce Proceedings in order to demand the division of any Marital Property.

 

If you cannot convince your husband that it would be unwise to put all the sale proceeds from the house into the business, it might be a good idea to make an appointment with a financial planner who would probably give your husband the same plan that you and I agree on. For some reason, an individual is more likely to believe and follow the advice that he had to pay for, rather than listen to us wives. Please leave a positive rating so that I can receive credit for researching your question and furnishing you with Answers and information. It will not cost you anything additional, but it is necessary for me to receive credit and payment for assisting you. Thank you for understanding,

 

________________________________________________________________________

 

Please be kind enough to rate Excellent Service" so that I receive credit for assisting you, it will not cost you anything additional to give me a positive rating, and that is the only way I can receive credit, Thank you for understanding,

 

Bonus and Positive Feedback on survey is very much appreciated,

 

ANDREA

 

 

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