Moore Marsden Calculation In Divorce

Moore Marsden Calculation In Divorce

Moore Marsden Calculation In Divorce

Moore Marsden Calculation in Divorce

If you owned a house prior to marriage, this is your separate property.  However, if there is still a mortgage on it when you get married, with no prenup, if you use earnings during marriage to pay down principal, the community will acquire an interest in your separate property.  To determine what interest the community has, you will use a formula call the Moore-Marsden calculation.

What’s a Moore-Marsden?

You may have heard this in your divorce case.  This refers to a calculation of community interest in a separate asset. The name comes from 2 divorces cases, 28 Cal.3d 366, 24172, In re Marriage of Moore, and 130 Cal.App.3d 426, 47922, In re Marriage of Marsden.

Moore-Marsden Formula

The community acquires a pro tanto (dollar for dollar) interest in the ratio that principal payments on the purchase price made with community property bear to payments made with separate property.  The community also accumulates an interest in any increase in value (appreciation), using the same formula.

Show Me a Moore-Marsden

Original Purchase Price = $1,000,000
Down Payment = $200,000
Original Mortgage = $800,000
Pay Down of Principal Before Marriage = $100,000
Pay Down of Principal After Marriage = $150,000
Value of Property At Date of Marriage: $1,500,000 (ie appreciation of $500,000 between date of purchase and date of marriage)
Value of Property at Date of Division: $3,500,000 (ie appreciation of $2,000,000 during the marriage)
Mortgage Loan balance at Date of Division: $550,000
Equity = $2,950,000

Formula for Separatizer Pro Tanto Interest

The separatizer’s pro tanto interest is calculated by adding his down payment and original mortgage, then subtracting the marital principal divided by purchase price.

Down Payment $200,000
Original Mortgage + $800,000
Marital Principal Mortgage Pay down – $150,000
Purchase Price ÷ $1,000,000
Formula for Community Pro Tanto Interest

Community Pro Tanto Is Calculated using marital mortgage paydown as numerator  purchase price as denominator.  Here, it is 15%.

Marital Principal Mortgage Pay Down $150,000
Purchase Price ÷ $1,000,000
Purchaser’s Interest in the Property is the Following:

Down Payment of $200,000
+ Pre-Marital Principal Pay Down of $100,000
+ Pre-marital Appreciation of $500,000
+ Purchaser’s pro tanto interest in marital appreciation (85% × $2,000,000) $1,700,000
+ 1/2 of Marital Principal Mortgage Pay down ($150,000 x .5)   $75,000
+ 1/2 of Community’s Pro Tanto Interest Marital Appreciation (15% × $2,000,000 × .5)  $150,000

= 2,725,000
Other Party’s Interest in the Property:

1/2 of Marital Principal Mortgage Pay Down  of $150,000 =  $75,000
+ 1/2 of Community’s Pro Tanto Interest Marital Appreciation (15% x $2,000,000) $300,000 = $150,000

= $225,000
Moore Marsden Calculator

Here is a Moore Marsden Calculator online.  

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