One of the most complicated aspects of divorce is dividing property and assets that both parties own, or community property. If you are currently going through a divorce involving real property, you may come across the phrase “Moore/Marsden calculation.” Understanding what this is and how it might affect your dissolution of marriage is important to prepare for the weeks ahead. Here is what you need to know about this calculation in California.
California Divorce Laws
California Family Code Section 2640 grants the right to reimbursement for separate property contributions toward community property and for community property contributed to the individual property of one spouse. If this code sounds confusing, don’t worry. This is where the Moore/Marsden calculation comes into play, to make it simpler to calculate each party’s interest in real property when one spouse bought the property prior to marriage.
If one spouse purchased the property prior to marriage, and has a mortgage partially paid off throughout the marriage or partnership, the Moore/Marsden calculation becomes involved. The issue is that the spouse that originally bought the asset has a separate, premarital interest in the property. However, the couple used community property money to further fund the property, thus creating a community property interest. Figuring out how to divide this property takes a special equation, especially if a mid-marriage refinance or post-separation charge/credit occurs.
What is the Moore/Marsden Calculation?
The Moore/Marsden Calculation stems from two court cases in California: In re Marriage of Moore and In re Marriage of Marsden. Moore was a Supreme Court of California case, while Marsden was an appellate case that further clarified the ruling in Moore. These two cases held that when the community in a marriage pays down principal, the community may receive a dollar-for-dollar reimbursement as well as a pro tanto (as far as it can go) share of the property’s appreciation from the date of marriage to the date of the trial. Thus, we have the Moore/Marsden calculation, which is as follows:
- Add together the dollar-for-dollar reimbursement and the pro tanto share and you get the community interest in the property. Multiply this by this equation:
- Numerator = Community property payments of principal
- Denominator = Purchase price of the home
To determine the separate interest in the property, the courts use a different formula (the Separatizer formula). Here is an example of the Moore/Marsden formula at work: Party A purchased a home for $400,000 in 2013. Party A made a down payment of $50,000 and paid an additional $100,000 before Party A married Party B in 2015. At this point, the price of the home is $500,000. Once married, both parties paid another $100,000 of principal. On the date of the trial in 2017, the home is worth $700,000.
Using the Moore/Marsden calculation, the community would receive $100,000 for reimbursement of the pay down of principal. In addition, the community would get $200,000 (the appreciation of the home from marriage to trial) multiplied by the fraction $100,000 (community property payment of principal) over $400,000 (purchase price of home). The community interest would thus be $150,000 ($100,000+$200,000 x [$100,000/$400,000]), not counting the Separatizer calculation.
Learn More About Moore/Marsden Calculations
It is very rare to have a straightforward Moore/Marsden calculation during real-life divorce proceedings. Usually, a married couple makes improvements to the home, refinances, or makes a change in title that will alter the original equation. It is important to discuss your situation with an experienced San Diego Family law attorney in California for more specific answers to your property division questions. Speak with some of the best San Diego divorce attorneys at Boyd Law for legal counsel regarding your pending divorce and answers to any property/asset division questions you may have.