Ok, just how much does interest percentage of an inherited home does a divorcing spouse own after a short 6 years...

Question

The wife made no payments or contributions during the 6 year marriage.  The house was 100% inherited during the marriage but there was a refinance due to owing half the value to a sibling after parents died.  House was in a living trust and the money for buyout was deposited into the trust, so the property was transferred 100%  to the paying sibling.  Now the wife was put on the title for the refinance; it has only been 2 years ago that happened.  Wouldn't the title transfer be presumed invalid since it was required for the refinance only?   I get that the community property aka the husbands' paycheck paid the mortgage, but wouldn't a percentage of that be all the wife gets?   The equity gained since the beneficiary of the trust acquired the property is a little over 100 thousand BUT the loan owned is 300 thousand, so would that cancel out the 100 thousand equity?  Then all the wife would get is a small percentage of the community funds used the last 2 years for the payments???

Tobie B. Waxman · Answer

The community's interest in this property results from mortgage payments made DURING the marriage.  The community acquires an interest in the property when the community makes the mortgage payments.  If mortgage payments you made after you inherited the property, came from your earnings during the marriage, then those mortgage payments were made with community property.  Any increase in equity resulting from those payments would be community property to which your spouse would be entitled to half.  Yes, an argument can be made that adding Wife to the title was not with the intent of transmuting the property from separate to community (if using her was solely for purposes of getting approved for the refi loan)

James L. Arrasmith · Answer

In California, inheritance is typically considered separate property, even if acquired during the marriage. However, when the inherited property is refinanced and a spouse's name is added to the title, this can create a presumption of a gift to the marital community, potentially changing its character from separate to community property. The key factor here is the intention behind adding the spouse to the title. If it was solely for refinancing purposes and not intended as a gift, this might be argued to maintain the property's separate character. 
 
The equity gained since the refinance and any reduction in the mortgage balance paid from community funds (like a spouse's income) could be considered community property. The wife may be entitled to a portion of this increase in equity, but not necessarily a share of the total property value. 
 
Given the complexity of your situation, particularly the refinancing and title change, it's crucial to analyze all details and intentions behind these actions. A thorough evaluation of the property's history, the reasons for refinancing, and the use of community funds is necessary to determine the equitable division of this asset in a divorce. 
 
It's also important to consider the loan against the property. If community funds were used to pay down the mortgage, this could impact the calculation of what share each party is entitled to. The interplay between the inherited property's initial value, the loan amount, and the equity gained can be complex and requires careful legal analysis. 
 
Overall, the division of property in divorce is highly fact-specific, and it's advisable to seek legal guidance to navigate these nuances and protect your interests.

Q: Ok, just how much does interest percentage of an inherited home does a divorcing spouse own after a short 6 years...