Who Gets the House in Divorce and Divorce Mediation?
An interesting question concerning the difference between marital and separate property in the distribution of marital property in a Long Island divorce came up today in a divorce mediation here on Long Island. A husband and wife had been married for 25 years, each for a second time. The Wife had purchased the marital home in her own name a few months before they were married. She was determined to have it in her own name because she had lost her house in her first divorce. It remained in her name throughout the marriage.
The wife had never really worked during the marriage. The Husband had paid all the expenses of the marriage, including the mortgage on the marital residence. During the marriage the Husband had earned a New York State teacher’s pension,, which is not unusual on Long Island.
Now they are getting divorced. The Wife’s position is that the house is a separate, pre-marital asset. The Husband should get nothing from the house. On the other hand, she felt that the Husband’s New York State teacher’s pension is a marital asset and she should get 50%. The Husband felt that this was extremely unfair. He had paid all the marital expenses for 25 years. Should he really get nothing? The Wife said, “That was rent”.
Sometimes Yes — Sometimes No
On the face of it the Wife is correct, an asset purchased prior to the marriage with separate funds, that she has kept separate, is a separate asset. The Husband has no interest. However, as the facts developed it began to look a bit different. It turned out that the Husband, who had a home renovation business on the side, is a skilled plumber and general contractor, and had virtually redone the house with his own labor and money from his employment. Even more importantly, he had paid off the mortgage. Not a month at a time, but over about seven years he had put every penny he could put his hands on to pay down the mortgage so that they could live rent free when they retired. Now suddenly, is he supposed to get nothing? The Wife was determined. Her lawyer had told her that the house was separate property and the Husband didn’t get a dime, but that the pension was marital and it was 50/50.
What Have The Courts Said?
I am not here to give legal advice, and what the Wife’s lawyer told her sounded correct, but it just didn’t quite make sense to me. I did a bit of research and found that my sense of it was correct. A number of cases in New York have held that where a house is purchased shortly before the marriage in the name of only one party the increase in value of the house will still be considered marital property if the non-titled spouse contributed to the appreciation.
What Should I Do?
As I said, I am not giving legal advice or opinions. If you have a problem like this you should consult your attorney. However, it seems to me that here, where the Husband put a great deal of work into improving the house, and paid off the mortgage, it is difficult to argue that he is entitled to nothing.
What is my point? Really, it is that these financial issues of property distribution are more complex than they might at first seem. You need to be informed, but settling something like this through the courts could be ruinously expensive. Better to understand the issues and how they might work out through the court system, then come to a compromise through divorce mediation. If this is the kind of problem that you might be facing, give us a call. We can help you resolve it without the enormous expense of litigation.