The list of aspects of divorce that are usually not considered in the heat of the moment when a separation is declared and the spouses begin marshaling their forces is long and intimidating. Most people would prefer divorce to be a fast, easy process, but the longer a marriage has existed and the more successful the people involved were in terms of their estates, meaning - the more "stuff" they have - the more complicated it usually is. One of the more confusing aspects of a divorce is property, especially property owned by one spouse prior to the marriage but then maintained and improved during the marriage.
Prior Debt
If a property was owned individually by one spouse prior to marriage, the property is part of their individual estate and not considered community property unless they alter the deed to include their spouse. However, this also means that the value of the asset prior to the marriage must also take the mortgage owed into consideration. Few people in such a situation have their property appraised prior to their marriage. If the spouse adds their partner to the deed at the time of marriage, the court will regard this as a presumptive gift and the property is considered part of the community estate regardless of original ownership.
Created Value
Once married, if community funds are used to pay the mortgage, taxes, etc. and to make improvements, calculations must be made as to the increase in equity and the increase in value created by the improvements. In the event of divorce, the difference between the value of the property at the time of marriage and the value of the property at the time of divorce must be ascertained, and the court can order reimbursement from the community estate to the individual estate of the spouse.
Definition of Value
It is sometimes vexing to one half of a divorcing couple that home improvements performed personally by one spouse are judged solely by the appraised value it added to the property despite the fact that no money was directly invested, or that money used to purchase equipment and supplies for improvements were community funds. Untangling this would require Tracing of funds and a reimbursement order from the court, which it is not required to offer. Although it feels unnatural at the time, the best practice would be to have all separately-owned property appraised at the time of marriage in order to provide a clear dividing line in the event of divorce.
If you have any questions about reimbursements in marriage dissolution or division or property after a divorce, please call John Powell III at 281-870-2053 and schedule a free 30-minute consultation. John is based in Pearland, Texas and has represented persons in literally hundreds of divorces to resolve their conflicts amicably with less expense & time. Visit http://www.powellfirm.com/
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