Is My Ex-Husband Entitled to the Down Payment Money He Put into Our House?

Do you have a pressing financial question on which you could use a bit of expert help? Email moneyeditor@purewow.com. Today’s expert is family law attorney Emily Pollock, a partner at Kasowitz Benson Torres LLP.

Q: “My soon-to-be ex-husband earned a big chunk of money while we were living together, but before we were married. Then, we got married and used $60,000 of that money as a down payment on the home we bought and have lived in ever since, with both of us contributing toward the mortgage. Now, he has moved out and I’m still in the home with our kids. We are discussing me buying him out of the house and he is saying he wants the down payment money back since it came from premarital assets. (We did not have a prenup.) Is he entitled to getting that $60,000 back, then splitting only the remaining equity?”  – Colleen, NY

A: In New York, money earned prior to marriage is separate property, regardless of whether the parties lived together while the funds were being earned. And, in the absence of an agreement to the contrary—like a prenup that specifies how any separate property contributions to a marital residence will be allocated upon divorce—your soon-to-be-ex-husband is entitled to receive that pre-marital money back. (It’s his separate property credit before you split the remaining equity in the residence.)

There is an exception. In order for him to be able to get that credit, he will need to be able to document that the down payment really did come from his separate property using account statements and records of payments. He will also need to ensure that the separate property was not commingled—or mixed—with other marital property.

What does that mean? Let’s say your husband had premarital earnings of $60,000 in Bank Account A when you got married in 1999, then contributed marital earnings to Bank Account A for another few years and made various withdrawals and payments from that account during this period. Then, in 2006, you purchased the home using $60,000 from Bank Account A. In this scenario, it’s not really possible to say how much—if any—of the $60,000 down payment is the $60,000 from his pre-marital earnings and how much is from marital earnings over the past seven years. The separate property and marital property became commingled the second marital money was deposited into Bank Account A and payments were taken out during the course of the marriage.

In other words, the “separate property” nature of the initial $60,000 is lost.

However, if the purchase of the house was soon after you were married and/or the $60,000 is easily traced to his pre-marital funds, then you are out of luck—or at least, out of any share of that initial $60,000.