Dear Quentin, I bought my home in California for $520,000 in 2017. It’s now worth $980,000. In 2019, I met my now-wife who moved in at the beginning of 2020. We married six months later in July 2020. Things were going great and we decided to have one bank account. I also added my wife to my home on the deed as 50/50 in January 2021.
I make close to $200,000 a year, and my wife makes $78,000. After I put my wife’s name on the deed, our relationship did a ‘180.’ I have mentioned how things have changed hoping she would take my feelings into consideration. I have also mentioned counseling, which I have attended, but she has no interest. I now want a divorce as I can no longer live the way I am living. My question to you is this: Is my wife entitled to half of my home given that she is on the deed and not the loan? Keep in mind she was only added to the deed in 2021. Or is she only entitled to the equity from the time her name was added to the deed? Thanks for any information you can provide, Wondering in CaliforniaDear Wondering, This is one of those letters where I wish you had written before you put your wife’s name on the deed of your house, and before you had commingled your bank accounts. For everyone else, it serves as a cautionary tale. Your wife is entitled to half of your home and half of your commingled funds, in the event that you divorce. Talk to a family attorney and give them the lay of the land. Your wife is on the deed, making her a co-owner. It’s not something that can be undone without your wife’s consent, and it seems unlikely — from everything you have said — that she would do that. If she were on the loan but not on the deed, we would be having a different conversation. (Being on the loan rather than the deed presented different complications for this divorced man.) California is a community-property state, and anything acquired during the marriage is considered community/marital property and typically split 50/50. Assets acquired before the marriage are considered separate property, but your wife would — for example — be still entitled to 50% of the acquired value during your marriage. That said, splitting assets 50/50 is not always so straightforward. “Valuing some types of assets can take time, commingling can make it more challenging to determine who is entitled to what, and if one spouse tries to conceal community property to avoid division, forensic accountants may have to get involved,” according to Renkin & Yip, a San Diego-based law firm. Given the disparity in your incomes, it’s clear your wife would not have been able to afford this home on her own. It’s hard to know what goes on inside a relationship, and we can never fully understand what goes on inside another person’s mind when it comes to romance and finance. A smart divorce attorney will be able to advise you on any negotiation power/leverage you may have. I do have some questions for you. How dramatic and sudden was the change in your wife’s behavior? Did she suggest that you put her name on the deed and commingle your accounts? Only you know whether the relationship is salvageable, but if you are unhappy you may not wish to subscribe to the sunk-cost fallacy. A divorce would be more costly 10 years from now. It’s a tough break — and a lesson to people everywhere to be careful about protecting their assets, especially with someone who they may have married in haste. Romance and emotions aside, six months or even a year is typically not long enough to get to know someone. People may behave in accordance with their wants and needs. You have learned that, and it could be a costly lesson. You can email The Moneyist with any financial and ethical questions related to coronavirus at firstname.lastname@example.org, and follow Quentin Fottrell on Twitter. Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns. The Moneyist regrets he cannot reply to questions individually. More from Quentin Fottrell: ‘I feel so betrayed’: Who should get my mother’s diamond rings? My late sister left them to her daughter-in-law. What options do I have? I sold my late mother’s home for $250,000. I make $80,000 and have $220,000 in student debt. I want to buy a house. Should I use all my inheritance for a down payment? ‘This guy grifted me hard’: My date chose an exclusive L.A. restaurant. After dinner, he accepted my credit card — and we split a $600 bill. Shouldn’t he have paid?