In many a marriage, especially if the newlyweds are on the younger side, it is not uncommon for a family member to extend financial assistance to the new couple for the acquisition of that “starter home.” The question often arises, however, as to how to treat the allocation of the parties’ respective interests in that house in the event of the dissolution of the marriage.
The answer to this question as to how to divvy up the interest in the marital home involves the analysis of several factors, including:
- Whether or not there exists a prenuptial agreement which may speak directly to the recognition of a financial contribution in connection with the purchase of the house;
- The existence of any contemporaneous documents indicating whether the financial assistance was intended as a loan rather than as a gift;
- The length of the marriage and the respective contributions of the parties to the maintenance of the property during the marriage; and
- Whether the original house is still owned or, if instead, it was sold and, perhaps, another home purchased with the proceeds.
If you find yourself in a situation in which there may be a dispute as to the allocation of the interest in the marital residence as the result of marital dissolution be sure to call a member of the divorce team at Cohn Lifland Pearlman Herrmann & Knopf LLP.