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Dear Quentin,
My ex-husband and I have been divorced for 20 years, after being married for 11 years. We separated and he went to Georgia to file for divorce, stating in the decree that there was no marital property to divide. We actually have a marital home in North Carolina that we lived in for about five years before we lived overseas.
Apparently he tried to sell the home and discovered that he could not because I am on the deed — although I am not the loan. He finally reached out to me to propose that I sign off on a 70%-30% split since he has covered all of the expenses for the home over the past 20 years. He has been renting the home out and taking all of the tax allowances all of this time.
Any advice that you might have is appreciated. What can I do to expect a 50-50 split?
Divorced 20 Years
“This is a home you owned together, so I am confused as to why he attempted to sell it without your knowledge.”
MarketWatch illustration
Dear Divorced,
Ask not what you can do to expect a 50-50 split from your ex-husband, but instead tell your ex-husband what he can do with his offer of a 70-30 split.
What’s marvelous about your story is that 20 years after your divorce, your husband has given you a gift — he’s given you one final reminder of why it was a good idea to break up. He took “ownership” of this home, which you both owned, and maintained it for that period of time. He then attempted to sell the house without your knowledge — until he realized that it was impossible because you were on the deed, despite your having been divorced for 20 years.
Obviously, it would have been ideal to divide all of your assets during your divorce, but this house has likely increased significantly in value over that time. You don’t mention mortgage payments, so I presume the mortgage is now paid off, and your husband either made a profit or broke even on the rental income. Either way, the rental income and tax deductions likely more than paid for the expenses over the years.
This is a home you own together, so I am confused as to why he attempted to sell it without your knowledge. I have two theories: He either believed, erroneously, that you were on the loan but not on the deed of the home — it turned out to be the other way around — or he thought that time + distance = a quiet payday for him. Either way, I’m not sure what he did was on the up-and up. But you are on the deed, not on the loan, so he has no leverage.
So here’s what I would like you to write in an email: “On the one hand, I do appreciate that you took care of the house. On the other hand, the house produced rental income, so it either paid for itself or you made a profit, and you also took a tax writedown on all of those expenses. So I suggest a 50-50 split.” Once you’ve gotten that out of your system, delete that email and simply tell him: “A 50-50 split seems fair and equitable, all things considered.” If he balks, suggest filing a partition action.
You will also face a capital-gains tax when you sell. For the 2023 tax year, you are not subject to capital gains taxes if your taxable income is $44,625 a year or less as a single person, according to Bankrate.com. If you earn between $44,626 and $492,300 a year as a single filer, expect to pay 15% on a $250,000 profit. Above those levels, the capital gains rate would be 20%. (Your ex-husband also likely claimed rental-property depreciation.)
All’s fair in love and divorce, but not always in marriage. I’ve received letters from people who were either confused about whether their name was on the deed or loan, or wondered if they were outright deceived. I hope this is not emblematic of what goes on in marital finances. But that’s why we have community-property laws, according to which anything acquired during a marriage belongs to both parties, and equitable-distribution laws, under which property is divided fairly, if not equally.
The accumulation of marital property typically ends when one or both parties file for divorce; how you would have divided property during your marriage would have depended on where you filed for divorce, among other factors. For example, if your husband paid for a house during your marriage out of an inheritance — considered separate property — he would likely own it outright if your name was not on the deed. But your name is on the deed, so you are co-owners.
If your ex-husband did try to pull a fast one, his attempt backfired. If he’s an honest Joe, I still suggest rewarding him with 50% of this house.
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as Twitter.
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