Can you help me SPLIT our HOUSE MONEY from our DIVORCE?

Question

Okay here's the scenario. We are good friends. We have respect for each other and want to split everything outside of lawyers. And we want to be totally fair. We really do.

My wife got a gift of $10000 from her Dad before he died. We used that as a down payment on a house.

We split up last year and divided all of our bank accounts in half and agreed that would be fair.

Now she refinanced the house and the difference in the appraisal to the payout figure is $32000.

I want her to have her $10000 gift from her dad.

She says we should split $32000 in half, $16000 each, and then I pay her the $10000 from my share. Which makes a $26,000 to $6000 split.

I say the house should pay the $10000, then we split the remaining $22,000--$11,000 each. So the split would be $21,000-$11,000.

We both want to do what's fair but we both feel strongly for our own opinion and need outside help.

What is truly fair?

I need an exact amount of who gets what. Yes, I want her to have the $10000 gift. No she has not consulted a lawyer.

We really are good friends.

Answer 1

The house should pay $10,000 first. Because when it was first placed in the house, and you both owned the house, that effectively put $5000 in for your wife and $5000 in for you.

When you take the $32,000 payout, and split in the middle, $16,000 x 2, your wife's $5000 part in the original down payment is already in her $16,000 share. You will only need to give her your $5000 part of the downpayment from your $16,000 share. This view is pretty much the same as yours but using your wife's method (she just forgot to compensate for her initial share of the downpayment). So $22K for her and $11K for you.

Answer 2

Okay, well here is my opinion. If yall were married when she got the 10,000 from her dad, then it was for BOTH OF YOU. Not just her. Even tho it was her dad, yall were married. So, on that note, the 32,000 should be split in half evenly, thats it. Now, IF, you both agree that the 10,000 is hers and hers only. And you dont want it, and want her to have it. I think the house should pay out the 10,000 then split the 22,000 evenly. That would be the most fair if you do it that way. BECAUSE, the 10,000 was the down payment, it should be payed back first, then the total sale of the house be split. Hope this helps, good luck.

Answer 3

Go to a legal document preparation service. If everything looks like it's going to be clean cut, they'll use a program called Disso Master or something similar which is basically Quicken for divorces. I don't know which state you live in but if it's CA, you've got community property to worry about so you might be better off with some basic consultation. Your ex should definitely get the $10,000 back and with the house. You should both split the cost of the house because you went into it together. I can't say what's truly fair. The only way to do that is reach a concensus. Good luck.

Answer 4

OK so here is my opinion coming form a contentious 37 month divorce battle that cost me over $200,000 (in cash) / (60 k martial debt plus 140 k in legal fees).

Your best advices should be solicited by an accountant who understand the tax implications regarding these issue (particualry in a divorce). In fact, you could be entitled to the $10,000 share if the gift was used during the marriage for community property. However, your calculation is correct, whereby the 10k stays with the re-appraised value of the house and you split the remaining 22 k. This split could be confirmed by an accountant through mediation (vs attorney).

However, keep this in mind, NEVER allow the dispute to be referred to seperate attorneys (better to jointly use one if needed), otherwise the legal cost for a motion will START around $2500 - $5000 / each and can easily climb from there.

Good Luck, it appears you have no kids involved which always causes the largest disputes.

PS In the future, if you have kids, attempt to keep all your property solely in your name and/or children so it cannot be divided in a dissolution.

Answer 5

Based on what you told, and looking at her actions, I guarantee it to you, she has already consulted an attorney and is doing exactly what she was told to do. She is not your "good friend". She is your worst nightmare right now whose goal is to leave you with nothing. Do not base the division of your property on the fair market appraisal. Base it on the final sale of the house instead. By the way, how in the world did she come up with that $32,000 figure. Did you see the papers and went over the numbers yourself to confirm it? Did she (!) hire and paid for the appraisal??? Exactly. Hire your own appraisal, and you will be amazed at the difference in the figure he will come up with. You absolutely must hire your own appraisal to appraise the house and your own CPA to go over the refinancing papers. You are going to lose thousands if you do not hire them. This is only if she is going to keep the house and pay you off the money.
If the house will have to be sold in order to divide the money, then the appraisal thing has nothing to do with the division. The division must be based on the final selling price. If you sell the house, and after paying off the mortgage and the selling costs, you still have $62,000 left over, that is the amount to be divided between you two.
By law, the $10,000 gift must be deducted first. Whatever is left over AFTER the $10,000 gift deduction is to be split in half. If after the sale of the house, the left over is $46,000, deduct the $10, 000 gift; the remaining $36,000 is to be split in half. This will make $18,000 for each of you.
I bet she is wanting to keep the house and not selling. Absolutely hire your own appraisal and the CPA in this case. Any gifts must be deducted first before the division occurs; this is a law. Be careful with your "good friend" or she is going to rip you off from what is rightfully yours. She is already doing it.

Answer 6

I think your way is fair - if you split it her way, she effectively ends up getting some of the money twice. If you split the $32,000 first, she's already been credited half of her $10,000, and you'd only owe her $5000. If you split the $32,000 and THEN you give her $10,000, she'll still have gotten $5000 to begin with, plus $10,000 from you, making it unfair.

Look at it this way: pretend you add her $10,000 in (or subtract it, I suppose), meaning that you'd owe the bank or whomever $42,000. Half of that would be $21,000 - what you each owe. You pay your $21,000, she gets credit for the $10,000 gift, and she pays $11,000.

Answer 7

Split ups are never easy!
In some peoples eyes I am a fool for I just walk away. Money is not worth fighting over, which in your case it sounds like you two are real civil!! Congratulations!
I gave up some property with a house on it and a big two bay shop. For my sanity I just walked.
Take your personals and walk away. Then again this is what I would do.
Good luck and wish the both of you well!

Answer 8

The fairest way would have to be to take out the 10g then split the remailder. That's my opinion. 10g was used as deposite, the Lady gets that back, The rest is an equal ammount of input so it should be an equal amout of return. Great to hear that the legal Vultures are not going to get fed because they will take any profits the both of U have made while destroying the relationship.

Answer 9

Are you two sure you should be getting a divorce? I know happily married couples that can't come near the amicable solutions about the finances that you two have come up with. Maybe a financial councillor more familiar with the way the courts would rule is your only option. But somehow I think you'll both come to an agreeable decision on your own--that's if you do ever get divorced.

Answer 10

I had this same situation in my divorce.

Here is how you do it....

The house is worth $32,000 in equity. Split that in half. $16,000 each.

Then give her $10,000 outright.

You owe her $26,000 and you would get $16,000.

If you choose to pay her out of your share....then do that. This is the "legal" way to do it....as I used a lawyer.

You can use a lawyer you know, and both use the same one. That is how I did it when I was still "friends" with my ex-. We split the single attorney fee, which was helpful, but the paperwork was done the right way, and fairly.