Accounting For Special Equity In Divorce Litigation
My friend and colleague Steve Futeral defines Special Equity on his outstanding website as follows: “A special equity interest is created when one spouse’s direct or indirect contributions increased the value of the other spouse’s non-marital property.” The most common example is when one spouse makes an improvement to another spouses separate property (such as a home) which then, as a direct result, increases its value.
This increase in value of non marital property, or Special Equity, is the separate property of the party who caused the increase in value. It is only fair that, should the marriage come to an end, the a party is permitted to re-coup his or her contribution to the other’s separate property.
Settlyd Family Law Software has created a dedicated line item for Special Equity on their Asset Division Worksheet.
The Settlyd Asset Division worksheet efficiently categorizes Special Equity as non marital property. The worksheet clearly tracks Special Equity as a credit to the contributing party but does not calculate a corresponding debit to the spouse as it is separate property.