When Crosby, Stills, Nash and Young, famously sang “Our house is a very, very fine house with two cats in the yard, life used to be so hard, Now everything is easy cause of you…,” they clearly were not contemplating life as a divorcing couple and all of the angst that goes with having to surrender a lifestyle with a home at its center. Some of the most emotionally taxing questions for couples enduring a divorce to answer are: Who gets the home? Should the home be sold? How much is it worth? How do we quantify any separate property claims? And, more particularly, where one spouse claims that the marital residence is his or her premarital property, and therefore, separate property, what extent, if at all, should the other spouse share in the value of that residence or the appreciation/increase in value of that residence over the course of the marriage, regardless of the marriage’s length?
In many parts of New York State, residential real estate has increased in value far beyond the owners’ dreams, sometimes in very short periods of time. It is not unusual for newspapers to report astronomical gains when New York City real estate is sold; reported sales for $20 million or more seem like a weekly occurrence in The New York Times. Anecdotally, many of us hear tales that more modestly priced homes can experience significant increases in value over the course of 10 or 20 years, sometimes making a $50,000 suburban residence worth $100,000 at the time of divorce just 10 years later or a $250,000 Manhattan residence worth nearly $2 million some 20 years later.
