The Moneyist: My husband and I are divorcing. I brought $35K into the marriage. He wants me to subtract that money from our home’s equity. I say split the equity first

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Dear Quentin,

My husband and I are divorcing, and we live in Minnesota. 

I came into the marriage with $35,000 from the sale of my home, and he came into the marriage with debt. Our current home is valued at $320,000 with a $225,000 mortgage. He has agreed to return my $35,000 to me. 

However, he wants to subtract the $35,000 from the current value of the house and then split the equity in half. I think it’s more fair to split the $95,000 equity first and then pull the $35,000 out of his half of the equity.  

I honestly don’t know what the fairest way is as each one has very different outcomes. We’re trying to be civil and do this without attorneys. Thank you for looking at this for me.

What do you think would be a fair way of splitting our assets?

Soon-to-be Single

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Dear Soon,

Divorce is a time to be practical — rather than polite.

It’s great that you want to split your assets without an attorney. It can be done if your assets are very simple, but hire a lawyer if you can afford one to make sure you don’t leave any loose ends that could cause problems later. Incomplete or incorrect forms can lead to the rejection of your divorce application. The downside to hiring a lawyer: It can cost up to $15,000, or more.

That said, I’m on your husband’s side. His suggestion leaves you with $82,500 from the sale of your home and gives him $12,500. By subtracting the $35,000 you invested in the property from its current value, he receives $30,000 and you receive $65,000. Treat that $35,000 as a lien on your home — you invested in the marital home when you purchased it, after all.

Your husband’s offer is a generous one. You technically commingled your assets, so he could — if he were operating strictly by the letter of the law — insist that the equity in your home be split 50/50. He wants to make sure that you leave the marriage with what you had when you came into it. Perhaps it’s his way of making amends for words and actions that cannot be undone. 

That $65,000 could come in very useful in your new life.

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