Moore/Marsden — CP Payments on SP Realty

The Moore/Marsden rule determines how much of a separate property (SP) home owned before marriage becomes community property (CP) when community funds are used to pay down the mortgage. The community's interest is calculated based on the amount of principal reduced by community funds compared to the original purchase price, plus any appreciation in value during the marriage.

A couple marries, and the husband owns a home worth $300,000 with a $200,000 mortgage. During their marriage, they use $50,000 of community funds to pay down the mortgage. The community's interest in the home would be calculated as the ratio of the $50,000 principal reduction to the $300,000 purchase price, plus any appreciation in value during the marriage.

Community funds, community interest: pay down the SP mortgage and watch your share grow!

Exams often include scenarios where students must distinguish between principal reduction and interest payments, leading to confusion about what constitutes a community interest. Students may also overlook the appreciation aspect when calculating the community's share.

Questions typically present a fact pattern involving a marriage where one spouse owns property before marriage, followed by community contributions to the mortgage, requiring students to apply the Moore/Marsden rule to determine the community's interest.