Moore Marsden Calculation Worksheet
Calculation Results
Understanding the Moore Marsden Formula
The Moore Marsden calculation is a legal formula primarily used in California family law to determine the community property interest in a residence that one spouse purchased before the marriage (separate property). When community funds (income earned during the marriage) are used to pay down the principal of the mortgage on that separate property, the community acquires a pro-tanto interest in the asset's appreciation.
How the Calculation Works
This worksheet breaks down the equity into two primary components: the separate property interest and the community property interest. The formula follows these logical steps:
- Step 1: Calculate the total appreciation of the property (Current Value minus Original Purchase Price).
- Step 2: Determine the Community Percentage. This is the amount the community paid toward the principal divided by the original purchase price.
- Step 3: Determine the Separate Percentage. This is the sum of the down payment and any pre-marital principal reductions divided by the original purchase price.
- Step 4: Allocate the appreciation. The community gets its percentage share of the total appreciation, and the separate owner gets their percentage share.
- Step 5: Final Totals. The community share equals the community principal reduction plus its share of appreciation. The separate share equals the down payment, pre-marital reduction, and its share of appreciation.
Example Scenario
Imagine a spouse buys a house for $400,000 before marriage with a $40,000 down payment. Before marriage, they pay off $10,000 in principal. During the marriage, the couple uses joint earnings to pay off another $50,000 in principal. At the time of divorce, the house is worth $700,000.
- Total Appreciation: $300,000 ($700k – $400k)
- Community Interest: $50,000 / $400,000 = 12.5%
- Separate Interest: ($40,000 + $10,000) / $400,000 = 12.5%
- Community gets $50,000 (reduction) + $37,500 (12.5% of appreciation) = $87,500.
Key Factors to Remember
Note that Moore Marsden applies to the principal reduction, not interest payments, taxes, or insurance. Only the amount that actually reduces the loan balance is used in the calculation. Furthermore, any capital improvements made with community funds may require a separate Moore Marsden / Marriage of Bono analysis for additional reimbursement or interest.