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socrateaser, Lawyer
Category: Legal
Satisfied Customers: 38895
Experience:  Retired (mostly)
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Hi Again, My question is related to property division. Six

Resolved Question:

Hi Again,

My question is related to property division. Six months back I got married after dissolution of marriage. Since then home prices have sky rocketed in my area. I would like to know how the evaluation of house will be done. Would it based on the price 6 months back when my current spouse also became a stakeholder in the joint property. I had bought this house prior to my marriage with my Ex and I am the only one on the title.
Submitted: 4 years ago.
Category: Legal
Expert:  socrateaser replied 4 years ago.
In the event of a divorce, the court needs to know the value of the property at the date of marriage, and at the date when each contribution is made, because the contribution affects the start date of appreciation or depreciation. Usually, if the property is costly, then a forensic accountant is required to testify to the dates and valuation amounts.

The formula is called "Moore-Marsden," and it's actually pretty simple, when there is only one contribution of separate or community property. But, when there are multiple contributions at different times, things get very ugly, very fast. Usually, with a typical divorce, the cost of the forensic accountant and related testimony and reports is more costly than the difference between what the spouses believe they should receive at divorce. Consequently, most cases settle by agreement, usually with very little actual math being done. Otherwise, there's no alternative but to spend about $10,000 on accounting and litigation to resolve the question decisively.

Hope this helps.
Customer: replied 4 years ago.
I might not have understood and missed answer to a key question. As most of the appreciation occurred after "Bifurcation of status" and for the sake of the example 06-01-2012 and lets say I got remarried on 07-01-2012. What would be the value applied for the final property settlement. The value on 06-01-2012 or today's value.

Also when does my current spouse become stakeholder in the property on 07-01-2012 or later whenever the final settlement occurs.

Expert:  socrateaser replied 4 years ago.
Appreciation that occurs post dissolution judgment continues to appreciate based upon the amount of community and separate property contributed to the property.

So, if the property is determined to be 50% community and 50% separate property, it was worth $100,000 on the date of the bifurcation order, and it appreciates to $200,000 before trial, then that additional $100,000 would be divided as 50% community and 50% separate property appreciation. This means that the spouse with the separate property interest would get 100% of the separate property appreciation from the dissolution date, and 50% of the community property appreciation (because community property is divided 50/50).

Now, if only one party is contributing to the property after dissolution, then that party may be increasing their separate property interest (e.g., by paying the mortgage with separate earnings) which would increase their proportionate separate property appreciation rights.

Like I said -- the math can get very ugly in a hurry.
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