Legal Question in Real Estate Law in California

Re: Property acquired before marriage and refinanced during marriage

I presume you are really trying to ask if the house is community property or not. The answer depends on many facts that you did not disclose.

Property ac1uired before the marriage, or during the marriage by gift or by inheritance is separate property be default. But there are ways to convert separate property to community property such as adding your spouse to the title to the house when you did the refinance. To the extent your commmunity property income was used to pay the mortgage, it might be partially community property. You may also have a prenuptial agreement that has some impact on the answer to your question.

There are many ways to answer your question. Your best bet is to consult a local family law attorney who has more time to ask all the right questions.

Re: Property acquired before marriage and refinanced during marriage

As Mr. Starrett points out, the ownership of the house may be 100% your separate property; 100% community property (in most practical effects, a 50-50 division of interest between the two of you); or somewhere in between.

Somewhere in between is perhaps the most likely.

The house was, of course, 100% yours in the first place, and refinancing would not necessarily change that unless there was also a change in how title was held, either in connection with the refinancing itself or at any other time for whatever reason (most often, as a gift).

If you never deeded over an interest, your marital community has probably gained a small percentage interest in the house over the years due to the use of community earnings to make payments on the principal. Money you make - and money your wife makes - from employment during marriage is community property. When that money flows into your mortgage payments, it starts to build a community interest, sometimes called a "pro tanto" interest, which is legal Latin for "so much as deserved."

If you made a 20% down payment on 1989, made payments regularly while single, have been using community money since 1998, and didn't take out equity when you refinanced in 2001, the community would have an interest that would depend upon the length of the mortgages and whether they were/are fully amortized or interest only or somewhere in between, but in many cases the pro-tanto community interest could be in the 20% area, leaving you with 80% as your separate property.

I believe the leading case on pro tanto ownership is In re Marriage of Marsden. There are others. I believe the so-called "Marsden formula" would be used to compute the community interest. Attorneys who do family law probably have tools to apply the Marsden (and other) formulas to your mortgage-payment data to determine the separate and community property interests.