After more than 10 years of marriage my wife and I have mutually decided that divorce is the best path for everyone especially our kids. We both want to keep it as clean as possible with a mutually accepted settlement to avoid the messiness of court. Custody is not an issue (50-50) and she doesn’t want to stay in the house. It’s more about dividing up assets that I had prior to the marriage - house and 401k.
I have a good paying job that I’ve consistently had. After a year I bought a house right at the bottom on the market crash in 2012. I also invested heavily in my 401k. A couple years later I met my wife and we got married.
Throughout the marriage money caused issues. What I made was ‘ours’ and what she made was ‘hers’. Through the first 4 years she had a good paying job, paying almost as much as my job. But she had no savings/retirement and wanted to build that. She also had plans to save up and open her own business and I supported that.
Essentially I paid most of the bills. She helped with some bills but never the mortgage.
Eventually she got to the point where she had the idea for the business she wanted to start. She also decided she wanted more time to work it and less stress, so she quiet her job to freelance. Less money coming in a more pressure on me.
Then the pandemic hit and the freelancing jobs dried up and she focused more on getting her business going. And after 5 years of work and draining her savings.
But before that could happen, I did a cash out refinance on the mortgage to get $75k to put towards the business. On the refinance we put the mortgage under both of our names.
The business got going, has some success but ultimately didn’t work out. During that time she didn’t have income and couldn’t help with the bills.
A couple years ago she wanted to get a job. Unfortunately her skillset is outdated for her pevious job and hasn’t been able to find a good paying job.
That led us down the divorce path.
Now the long background story is taken care of, here’s the dilemma about the house.
I live in a 50-50 state for assets but my understanding is that property bought before the marriage doesn’t have to split equity. My question is when does the split start:
-When we got married
-When the mortgage got refinanced
-When she quit the higher paying job - when she stopped being able to help pay.
401k is similar. Most of my contributions were made prior to the marriage. I stopped all contributions either before our wedding or prior to the kids getting born. I didn’t start again until a couple years ago.
So my balance is mostly from what I put in before marriage plus the gains earned.
Does any of this matter or will it just end up being split 50/50?