[quote frenchlambda]It is actually a little more complex.
The purchase price of the condo including closing costs was about $490k.
We took a $145k loan with BofA, $200k with in-laws and $145k down payment.
The down-payment amount was “assembled” as follow:
– $85k came from me as pre-marriage money
– $60k came from our joint saving account
So theoretically I put $115k down and she put $30k
[/quote]
The math is basically the same, but the results would be more in your favor:
assets = $490K(in property, form of condo)
liability = $30K(wife’s pre-marriage contrib) + $115K(husband’s pre-marriage contrib) + $200K(from inlaws) + $145K(bank loan)
Property drops to $340K in value, shared loss is $150K. Because condo is community property – loss is shared equally 50/50 at $75K each. Balancing against pre-marital assets gives the wife $30K – $75K or a net negative $45K and the husband $115K – $75K or positive $40K.
[quote frenchlambda][quote ucodegen]There is an interesting quirk in the “stipulation and order” in that you may still have a right to have the $85K reimbursed.
The way it was written does not tie it to the value of the property(condo),[/quote]Sure the way it was written does not tie it the property. But when tracing this money, it becomes obvious that it was. [/quote]
The ‘tracing’ requirement is only on the remaining 16K or so. No such requirement on 85K for “stipulation and order”. This is why wording is so critical, and why making sure the wording match the intent with legal docs is so important. In this case, it might save you. Both parties accepted the 85K not tied to real estate.
[quote frenchlambda]If I had bought a $50k car for both myself and my wife with pre-marriage money and then crashed a car into a wall resulting in a total loss, would I get $50k back from my wife after divorce? Obviously not.[/quote] WRONG! If the car was a personal asset, bought with money outside the marriage and the resulting personal asset was used by only you – this would be true. If the car was bought by money outside the marriage, but became an shared communal asset (California community property law) – this would be wrong. When transferring assets from outside marriage sources to communal, it does NOT matter what it is spent upon and the end value of the asset. The dollar amount matters. This is also why I said the gains on the real estate would have been communal unless specified with a prenup. Because your down was 75% does not mean you get 75% of the gain. Part of the problem is that though your down was 75% of the total down, it was about 25% of the total obligation. Both you and your ex-wife were party to the remaining balance, shared equally. You get your $115K back – net of the community property losses.
Take another example. Lets say your wife had a bit more money outside of the marriage and that her money was the down on the house. Your outside money bought the car. Now your wife trashed the car.. and now you are getting divorced. In the mean time the real estate value doubled. How would this be split?
[quote frenchlambda]My understanding was that whatever down-payment was used to purchase the property could only be recuperated from the equity that’s in it.[/quote]
Except for pre-marital assets. The property is communal. It is very hard to have the property part communal and part private (specific rooms or areas she can’t enter?). This means that when you unwind the assets of a marriage, you do appraisals of all properties to get equivalent values. You then extract the dollar amount of pre-marital contributions followed by divvying up what remains according to Community Property laws.
[quote frenchlambda]If I default on the loan from the ex-in-laws, then they do have a solid case for foreclosing.[/quote] Now that they have a loan secured by the property, you are correct. Before you signed over the trust deed, all they could do was complain.
[quote frenchlambda]The “stipulation and order” with the $85k never made it to the final divorce agreement.
[/quote] That is correct, and that is what may save you. The required reimbursement under the “stipulation and order” does not go away by omission in the MSA. You just have to be careful of blanket statements in the MSA which can make it go away.
[quote Eugene]Whatever rights you have now, two months after the divorce has been finalized, and after countless signed papers, it’s really hard for me to say.[/quote]
My point too, though there is that outstanding $85K which may not have been addressed by the MSA. This is why I would have an attorney look at all of those, the sequence they were signed and why (show him all of the signed papers, leave nothing out). He gave up tangible value in the trust deed to receive a ‘promissory’ on the 85K. Unless the MSA addresses the ‘promissory’, it doesn’t unilaterally go away.
