Q: Can I claim equity in a house bought with my husband's military death benefit?
My husband and I have been married for a year and a half. Four months into the marriage, my stepson committed suicide while in the military, and my husband received a death benefit as the beneficiary. We used this benefit to purchase and pay off a house, with both our names on the deed, and the funds were deposited into our joint checking account. Recently, I discovered my husband was cheating, and he claims I will receive nothing from the house because it was purchased with the death benefit. I have invested a significant amount of my own money into the house for its upkeep and renovations, though we had no written or verbal agreement about financial contributions. Is his claim valid, even though the house was paid from our joint account and both names are on the deed?
A:
In Ohio, the important issue of separate property vs. marital property is the ability to trace the source of the funds. How real property is titled is not determinative of how the property is titled. Even though the funds went to your husband and then were deposited into a joint checking account, your husband will most likely be able to trace some if not all of the death benefits.
While the house may be considered his separate property, the appreciation of separate property due to the efforts of one or both of the spouses during the marriage is considered marital property. In addition, if you can trace your separate funds to the renovations, then those funds may be characterized as your separate property.
Death benefit of $100,000 purchases house, your personal funds of $20,000 used to make renovations, and the house is now valued at $250,000. Your husband receives $100,000, you receive $20,000 and the remaining $130,000 in appreciation is marital property to be divided.
Todd B. Kotler and Nicholas P. Weiss agree with this answer
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