Q. Can you please help. I understand a Moore-Marsden analysis needs to be performed on my house in my pending divorce, but I don't understand what it is my attorney is telling me.
These are the facts. On 1/1/02 I put my wife on the title to the property. This is what happened.
Purchase price 6/92 before marriage
Date of Marriage 5/15/94 Market value
Market Value 1/1/2002 when Wife goes on Title
Market value 4/7/2008
Initial 6/92 Down payment
Principal Payment from separate prop. after separation
|FMV today (decreased since DOS)||$500,000|
Frederic, in San Dimas
Sample Moore Marsden Analysis
Here is an illustration of how the calculation works. You are attempting to determine two things: a) the amount of principal reduction on the real estate during marriage, and assuming the property is titled in only one spouse's name (or as of the date of transmutation, where both spouses go on title down the road, if applicable); and b) the percentage share by the community in the appreciation, if any, during the period in question.
Please see my FAQ on Moore Marsden generally. As you can see, it is complicated. You will need a forensic accountant and you may want a real estate expert because fair market values need to be fixed at various dates. Your situation is even more complicated because you placed her on title. The simplest Moore-Marsden ("M-M") situation deals with a property owned in the name of one spouse throughout the marriage, where marital earnings are used to pay the mortgage down - the fundamental concept is that the community should get some reimbursement for this, which comes back as a share in the appreciation and reduced principal obligation.
You will need to get:
- the mortgage payoff balances on the date of marriage;
- the mortgage payoff balance on date of the transmutation (when your wife went on title)
- the payoff balance at date of separation
- and you will need a mortgage balance near the date of your trial
I want to mention that all transmutations that favor one spouse and disadvantage the other, like putting her on the deed on 1/1/02, are subject to a claim that they should be set aside. This is because there is a presumption that your Wife exerted undue influence upon you - please research my fiduciary duty blog articles using the on-site search engine if this interests you.
Therefore, one scenario is:
Assuming $ 54,875 dowppayment
and $6,836 (paydown before M)
(you will need the mortgage statements) $25,125 appreciation before M
and ($20,197) principal reduction during M
then: $54,875 [DP] PLUS $89,803
[SP Loan of $110,000 minus $20,197 CP payments]
= $144,678 DIVIDED BY $164,875 [purchase price]
= 's a 87.75 SP Interest
$20,197 divided by $164,875 =' a 12.25% CP interest
NEXT $ 54,875 [DP]
(plus post DOS loan payments which I don't
see broken out so assume zero here) 61,711 PLUS 25,125 (premarital appreciation) PLUS 315,900 [87.75% of post-DOM appreciation to present assuming FMV $550,000 today equals $550,000 less $164,875 less $25,125 = "$360,000]" - appreciation percentage of H's SP interest = $402,736 (H's SP share)
COMMUNITY INTEREST IS: $20,197 plus 12.25% of 360,000 = $44,100"
plus $20,197 = "$64,297"
Wife' hare is this number divided by 2 = $32,148 equalization to W
I recognize that this may seem imcomprehensible. I will endeavor to write some simpler blogs on this topic, because this is a very common area for questions. Yikes!
Author: Thurman W. Arnold