Spouse Loses $50,000 Home Improvement Claim

It is very common for a couple to make improvements to their home during the course of their marriage. But what happens when one spouse uses separate property they received as an inheritance to make home improvements? Through careful review of the evidence your Woodlands divorce lawyer can increase your chance of winning or defending a claim for reimbursement as part of your Montgomery County divorce.

Alfred Baker was married in 1984. In 1996 he received an inheritance of $300,000 and placed it in separate accounts, not marital bank accounts. As we’ve discussed earlier, an inheritance received during the course of a marriage is separate property and not community property. With these funds, Alfred spent $104,000 to pay off the mortgage and $50,000 on home improvements. Unfortunately Alfred’s marriage broke down and his wife filed for divorce in 2006.

In divorce court, Alfred’s wife agreed that he spent $104,000 on the mortgage. Her divorce attorney disputed the $50,000 reimbursement for home improvement and the judge was left to decide the issue.

The divorce court judge agreed with Alfred and awarded him a reimbursement claim for the full $154,000. Alfred’s wife was not satisfied and appealed the decision.

The appeals court reversed the $50,000 reimbursement based on insufficient evidence. The court discussed the following legal requirements to uphold Alfred’s claim:

  1. When a party seeks reimbursement for a benefit conferred by his separate estate to the community estate, the party seeking reimbursement must prove the benefit arose from a separate estate by clear and convincing evidence.
  2. When funds from one marital estate are used to make improvements to the property of another marital estate, the proper measure of reimbursement is not the amount paid to make the improvements, but the enhancement value of the receiving estate. Enhancement value is determined by the market value of the property before the improvements were made as compared to the market value of the property after the improvements were made.

Alfred’s only evidence to support his claim was his testimony. His divorce lawyer did not prove to the court’s satisfaction the enhancement value of the improvements. He did not present any receipts or documents showing specific expenditures as well as tracing the funds to the separate account. With such little evidence the court could not support his claim for reimbursement.

If you or your spouse used separate property to benefit the marital estate while you were married speak with a Woodlands Divorce Attorney today to protect your rights.

The Woodlands Divorce Resource is here to help you with your divorce, child custody, or other family law issue in Montgomery County or Harris County. Many of our visitors come from the areas of Conroe, Oak Ridge North, Cut and Shoot, and other communities in the Montgomery County area or Houston and North Harris County. If you need legal assistance with your family law issue speak with a Conroe Divorce Lawyer today.