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)
Purchaser’s Pro Tanto Interest is 85%
Down Payment $200,000
Original Mortgage + $800,000
Marital Mortgage Pay down – $150,000
Divided by Purchase Price of $1,000,000
Community’s Pro Tanto Interest is 15%
Marital Mortgage Pay Down $150,000
Divided by Purchase Price of $1,000,000
Purchaser’s Interest in the Property:
Interest in Marital Appreciation (85% × $2,000,000) $1,700,000
+ Down Payment of $200,000
+ Pre-Marital Principal Pay Down of $100,000
+ 1/2 of Community Interest (15% × $2,000,000 × .5) + $150,000
+ 1/2 of Marital Mortgage Pay down ($150,000 x .5) + $75,000
+ Pre-marital Appreciation of $500,000
= 2,72,500
Other Party’s Interest in the Property:
Interest in Marital Appreciation (15% x $2,000,000) $300,000
+ Marital Principal Pay Down of $150,000
+ 1/2 of Community Interest ÷ 2
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