Considering Adding Your Spouse to the Deed on Your House? Here’s Why This NYC Divorce Lawyer Might Advise You Otherwise
A recent Third Department case, Myers v. Myers, demonstrates the consequences which may befall a spouse who owns property prior to marriage and then transfers same into joint name in order to satisfy a mortgage lender’s requirement that the other spouse’s name appear on the deed, as well. As noted by an experienced NYC Divorce Lawyer, In Myers, the wife owned the marital residence prior to the marriage, but approximately five (5) years into the marriage, transferred it into joint name, consistent with the mortgage lender’s demands. The purpose of obtaining the mortgage was to consolidate debt.
In December 2011, the wife commenced an action for divorce. The parties resolved all issues of equitable distribution, save for the distribution of the marital residence. The wife claimed that the value of the residence at the time of transfer was approximately $165,000.00 – and she was entitled to a separate property credit.
The Supreme Court issued a Decision & Order that both the marital residence and the mortgage debt were to be divided equally between the parties. The wife appealed such Decision & Order. On appeal, the Third Department, while noting that its 2012 decision in Campfield v. Campfield (upon which the Supreme Court based its Decision & Order), did not necessarily require the result as determined by the Lower Court. The Appellate Division noted:
“…To the limited extent that Campfield may be read to limit a court’s discretion to award a separate property credit to a spouse, like the wife, who transmutes separate property into marital property without changing the nature of the property itself, it should no longer be followed.”
The Court also noted that the decision to award a separate property origination credit is a determination left to the sound discretion of the trial court. The facts of the case were determinative that a separate property origination credit was not strictly mandated. Moreover, the trial court did not abuse its discretion.
Any spouse thinking of transferring separate property into joint name should think seriously about doing so for fear of what may transpire in the event of a divorce.