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  1. #1
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    Default Divorce

    My question involves a marriage in the state of:wv
    Ok second question...
    One of the things that will be in contention during my divorce will be the house. Ill explain the circumstances as best I can and would be happy to answer any questions you may have.
    My spouse and I were married in 2006. In 2010 I lost my job of 14 years, at the time our daughter was barely 2 and out 2br 900sq ft home wasn't adequate. We were not in the greatest financial shape, in fact never were as long as my spouse handled the books. About that same time I received a severance package from my former employer roughly in the amount of 25k.
    My parents offered to purchase a larger home for us, my spouse and I put the 25k down and agreed to make all payments associated with the home, mortgage ,taxes, insurance, upkeep etc. And we have done so for 10 years. We paid the mortgage directly to my parents bank. We used checks from our joint account and did so for all taxes insurance etc.
    The home is probably currently worth 220k and there's probably 110k left on the mortgage.
    One of the things my spouse is asking for is half of that equity.
    Legally can equity be awarded if neither of us owns the home? There is no contact, or any other written form of my parents and our arrangement.

  2. #2
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    Default Re: Divorce

    Quote Quoting Redbox77
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    My question involves a marriage in the state of:wv
    Ok second question...
    One of the things that will be in contention during my divorce will be the house. Ill explain the circumstances as best I can and would be happy to answer any questions you may have.
    My spouse and I were married in 2006. In 2010 I lost my job of 14 years, at the time our daughter was barely 2 and out 2br 900sq ft home wasn't adequate. We were not in the greatest financial shape, in fact never were as long as my spouse handled the books. About that same time I received a severance package from my former employer roughly in the amount of 25k.
    My parents offered to purchase a larger home for us, my spouse and I put the 25k down and agreed to make all payments associated with the home, mortgage ,taxes, insurance, upkeep etc. And we have done so for 10 years. We paid the mortgage directly to my parents bank. We used checks from our joint account and did so for all taxes insurance etc.
    The home is probably currently worth 220k and there's probably 110k left on the mortgage.
    One of the things my spouse is asking for is half of that equity.
    Legally can equity be awarded if neither of us owns the home? There is no contact, or any other written form of my parents and our arrangement.
    If the deal with the house is that it's your house and if you sell it the equity is going to go to you rather than to your parents, then yes, she can get half of the equity in the house and should.

    If the deal was that you were renters and your parents would always own the home, and if it was sold the equity would go to them, then that could be a different story. However, I suspect that the first example is the accurate one.

    Now might be a good time to refinance the home into your name, taking out enough of a mortgage to pay off your parent's mortgage and to give her the 55k or so that she might be entitled to receive, unless you can give her the 55k out of other assets on your side of the ledger.

    Don't try to pull a con on the courts on this one. I have seen people seriously crash and burn trying to do so.

  3. #3
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    Default Re: Divorce

    Quote Quoting Redbox77
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    Ok second question...
    You need to ask a first question before you can have a second question.


    Quote Quoting Redbox77
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    Legally can equity be awarded if neither of us owns the home? There is no contact, or any other written form of my parents and our arrangement.
    Assuming you meant "contract," not "contact," the answer is no. Your parents have equity. You and your wife have no equity and are merely tenants. In fact, if your parents were so inclined, they likely could evict you and leave you with nothing. Setting this up without a signed, written contract between you and your parents was very ill-advised.

    Note that, if your wife wants to take the position that you and she have a contract with your parent that does not relate to the title of the property, such that whatever verbal agreement you might have is not unenforceable because of the statute of frauds, that's something she'd have to address in a civil lawsuit against them. It would have nothing to do with your divorce.

  4. #4
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    Default Re: Divorce

    Quote Quoting Redbox77
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    Legally can equity be awarded if neither of us owns the home? There is no contract, or any other written form of my parents and our arrangement.
    Might not need one if your husband isn't claiming ownership against your parents.

    If he can show that a "constructive trust" (google it) was created when your parents retained ownership while you and he paid for it, then he might just get his 50% of the equity.

    After all, it's rather obvious that, the day after your divorce is final, your parents can quitclaim the house over to you and you would be "wrongfully enriched" (google that, too) by their doing so. I don't think it would be too difficult to convince a judge that it was their intention all along.

    I may be off base here, but my two cents worth says he's entitled to it.

    You might want to consider paying him his half of the equity to avoid protracted, and expensive, litigation. A court battle over $55,000 could cost you two years of your life and $20,000 to $30,000 in lawyer fees.

  5. #5
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    Default Re: Divorce

    Quote Quoting pg1067
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    You need to ask a first question before you can have a second question.




    Assuming you meant "contract," not "contact," the answer is no. Your parents have equity. You and your wife have no equity and are merely tenants. In fact, if your parents were so inclined, they likely could evict you and leave you with nothing. Setting this up without a signed, written contract between you and your parents was very ill-advised.

    Note that, if your wife wants to take the position that you and she have a contract with your parent that does not relate to the title of the property, such that whatever verbal agreement you might have is not unenforceable because of the statute of frauds, that's something she'd have to address in a civil lawsuit against them. It would have nothing to do with your divorce.
    I emphatically disagree with you. I am aware of at least two real world cases where a similar situation with the marital home was going on, and in both cases the judge awarded half of the equity in the home to the other spouse. The judge cannot award ownership of the home to either spouse, because it is owned by one spouse's parents. However, the judge certainly CAN order that the equity is a marital asset and order one spouse to pay out half to the other.

    In this particular instance it is even more likely, due to the fact that the spouse used 25k in marital assets to pay the down payment on the house...and used severance pay to do so. I would like to see him/her try to convince a judge that he/she decided to gift his parents 25k when he/she had just lost his/her job.

  6. #6
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    Default Re: Divorce

    Quote Quoting llworking
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    I emphatically disagree with you. I am aware of at least two real world cases where a similar situation with the marital home was going on, and in both cases the judge awarded half of the equity in the home to the other spouse.
    Citations? The property is owned by the OP's spouse's parents, who are also the mortgagors, so any equity belongs to them, and they would not be party to the OP's and his or her spouse's divorce. A judge handing a divorce between the OP and his/her spouse would have no jurisdiction to award anything in favor of the OP's spouse and against the OP's parents. If you're saying that some family law judge awarded an uneven split of marital property on the theory that the ownership of the marital home by one spouse's parents was a sham designed to deprive the other spouse of his/her interest, then that's a set of facts that's far removed from what the OP has described.

  7. #7
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    Default Re: Divorce

    Quote Quoting llworking
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    I emphatically disagree with you. I am aware of at least two real world cases where a similar situation with the marital home was going on, and in both cases the judge awarded half of the equity in the home to the other spouse. The judge cannot award ownership of the home to either spouse, because it is owned by one spouse's parents. However, the judge certainly CAN order that the equity is a marital asset and order one spouse to pay out half to the other.
    My point as well.

    West Virginia appellate decisions have often imposed constructive trusts on real property in disputes during a divorce under a variety of circumstances. I didn't find one "exactly" like this (I didn't read all 40 of the results) so I won't cite any but the implication is that a constructive trust may apply here. The OP's lawyer should be able to find appropriate authorities.

  8. #8
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    Default Re: Divorce

    Quote Quoting pg1067
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    Citations? The property is owned by the OP's spouse's parents, who are also the mortgagors, so any equity belongs to them, and they would not be party to the OP's and his or her spouse's divorce. A judge handing a divorce between the OP and his/her spouse would have no jurisdiction to award anything in favor of the OP's spouse and against the OP's parents. If you're saying that some family law judge awarded an uneven split of marital property on the theory that the ownership of the marital home by one spouse's parents was a sham designed to deprive the other spouse of his/her interest, then that's a set of facts that's far removed from what the OP has described.
    Let me try this again. The parents bought the home with the intent that it would belong to the married couple. Although there was no written contract the parents are essentially the mortgage company for the married couple. The married couple put 25k down, they make all payments and pay all maintenance for the home. Those are the facts that will be put in front of the judge should the OP try to claim that his parents own the home and he has no financial interest in it and never will have. The judge is not going to believe him, because the judge will have seen this kind of thing before.

    So, whether the judge orders an uneven split of assets, or orders the OP to make installment payments to the other spouse, or whatever else the judge deems fit to order, one way or another, it is almost guaranteed that the spouse will get their share of the equity.

    Quote Quoting adjusterjack
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    My point as well.

    West Virginia appellate decisions have often imposed constructive trusts on real property in disputes during a divorce under a variety of circumstances. I didn't find one "exactly" like this (I didn't read all 40 of the results) so I won't cite any but the implication is that a constructive trust may apply here. The OP's lawyer should be able to find appropriate authorities.
    In one case I am familiar with, the parents actually sold the house while the divorce was pending to another family member who in turn, sold it to a stranger. There were all kinds of shenanigans that went on in the divorce besides that. The judge made all family members involved parties to the divorce, and after multiple rounds of contempt ordered that the other spouse get the entire proceeds of the house. The verdict was appealed and was upheld on appeal. Unfortunately, I cannot remember the case name so I cannot cite it.

  9. #9
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    Default Re: Divorce

    Quote Quoting llworking
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    The parents bought the home with the intent that it would belong to the married couple.
    Did they? What if they testify to the contrary?


    Quote Quoting llworking
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    The married couple put 25k down, they make all payments and pay all maintenance for the home.
    Rental payments. Also, are you really assuming that these folks who didn't even bother to memorialize this transaction in writing were nonetheless sufficiently forward thinking that they kept documentation of the source of the down payment?


    Quote Quoting llworking
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    Those are the facts that will be put in front of the judge should the OP try to claim that his parents own the home and he has no financial interest in it and never will have.
    No. That's an argument that the OP's spouse might make, and you seem to be assuming that the court will blindly accept this argument as the gospel truth. Also, whether the OP might have an interest in the home in the future is not relevant.


    Quote Quoting llworking
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    the judge will have seen this kind of thing before.
    And your source about what all x-hundred judicial officers in West Virginia have seen before is what?


    Quote Quoting llworking
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    Those are the facts that will be put in front of the judge should the OP try to claim that his parents own the home and he has no financial interest in it and never will have.
    Nothing is "almost guaranteed" here. This simply isn't nearly as cut and dried as you think.

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