Insight

Marriage, Mortgages, and Millennials

More and more couples nowadays are cohabitating before marriage. But how does reimbursement claims work if a divorce happens?

Reimbursement Claims for Properties During a
Angelica Rolong Cormier

Angelica Rolong Cormier

July 31, 2020 08:00 AM

Prior generations aspired to get married, buy a home, and have children. In that order.

The millennial generation has changed that order. Both inside and outside the context of a divorce, this decision carries with it a variety of legal ramifications.

Millennials Cohabitating

The millennial generation is now between the ages of twenty-three and thirty-eight. They encompass the largest generation living today and the largest in the history of the United States. While the older part of the generation is still reeling from the Great Recession and housing crisis, the tail end has only recently entered the workforce, and like their older millennial cohorts, are facing financial struggles. Weighted down by high amounts of student loan debt and facing a challenging job market saturated with baby boomers eluding retirement, millennials are more unsure about their future and are more likely to delay marriage.

Faced with skyrocketing home prices, low inventory, and unsteady mortgage rates, millennial couples (married or not) are scraping together funds to buy a home and need to know that their investment is sound and their interests are protected.

The Scenario

Michelle (32) and Patrick (34) were in a relationship for eight years before getting married. Patrick proposed to Michelle on Christmas Day in 2012, but the couple decided to have a long engagement to save up for their wedding. In January 2013, Patrick purchased the home of their dreams, secured a mortgage, and put both in his name. The couple bought the house with the idea that this would be a long term investment for them both and that purchasing before marriage was a good financial investment for them both.

In March 2013, they moved in and a year later were married. Prior to marriage, they each paid half of the mortgage and bills from their own personal accounts. After the wedding, they paid the bills from a joint bank account. In May 2019, Patrick filed for divorce.

What, if any, rights do Michelle and Patrick have to the home?

Texas Law

Reimbursement Claims

Under Texas law, the house is Patrick’s separate property because he purchased it before the marriage, and he is the only one on the deed. Because the house is Patrick’s separate property, a court cannot award it to Michelle in the divorce.

With respect to the payments of the mortgage before marriage, each party paid half of the mortgage. In the eyes of the law, Michelle gifted Patrick with that money, and she has no legal right to seek reimbursement for her payment of the mortgage prior to marriage.

With respect to the payment of the mortgage after divorce, under Section 3.402 of the Texas Family Code, Michelle may ask the court for reimbursement. She can claim that after she and Patrick were married, marital funds paid for the house. Now that Patrick gets to keep the house, she may claim that his separate property estate benefited from the marital funds that paid for the house.

Under the Texas Code, Michelle may only be entitled to reimbursement of half of the marital funds that were allocated to the principal balance on the mortgage. To be clear, she would not be entitled to the full amount and would not be entitled to any amount that paid the interest on the loan. A judge has full discretion about whether or not Michelle will prevail.

Cohabitation Agreements

One way that Michelle and Patrick could have better confirmed and protected their premarital purchase was to have entered into a non-marital conjugal cohabitation agreement under Texas Family Code 1.108. In the agreement, they could have stated that, in the event of a breakup, Michelle would be reimbursed for the full amount of money she paid towards the mortgage during the period of time engagement. They could have agreed to the terms: when, where, and how she would be paid. Unfortunately, Michelle, like many other millennials, never entered into such an agreement. Essentially, after the divorce, she has to start over and may not be able to buy a home in the foreseeable future. Cohabitation agreements may be custom-tailored to protect the interests of unmarried millennial couples ready to make investments towards their future.

Headline Image: Roselyn Tirado / Unsplash

Related Articles

How To Find a Good Divorce Lawyer


by Best Lawyers

To navigate a divorce, which is inherently a complex legal landscape, finding the right divorce lawyer can make all the difference in the outcome of any case.

Bride and groom figurines on top of a wedding cake

Split Decisions


by Jonathan Merel

Divorce is inevitably fraught with a torrent of emotions on both sides. Don’t let this occlude your ability to plan rationally and dispassionately to ensure as smooth a process as possible. Here are five common pitfalls to avoid.

Two people standing on either side of a heart made out of curving roads

What If Johnny Depp and Amber Heard Had a Premarital Agreement?


by John M. Goralka

Oh, the gritty details we’re learning from the latest court battle between Johnny Depp and Amber Heard. This unfortunate airing of dirty laundry may have been avoided with a prenup. Should you think about getting one yourself?

What If Johnny Depp & Amber Heard Had Prenup?

Common Mistakes Made in a High Net Worth Divorce


by Stann W. Givens

If you are currently going through a high net worth divorce, you need to take care to not let your emotions get the best of you and push you to make a potentially terrible decision that seriously affects your future.

High Net Worth Divorce

Learning about Your Finances in Divorce


by Kathleen Ann Hogan

Finances in Divorce

The Advantages of Collaborative Divorce for Families


by Best Lawyers

Collaborative divorce is a cooperative alternative to a possibly contentious, court-focused divorce process. Learn more about collaborative divorce here.

Silhouetted figures split down the middle with child in backdrop

The Top 7 Things to Know Before Filing for Divorce


by Best Lawyers

Consulting with a qualified divorce attorney can help you understand your rights and obligations when filing for divorce. Here are 7 things you should know.

Two golden wedding bands with a crack down the middle

Announcing the 2022 Best Lawyers: Family Law Publication


by Best Lawyers

Featuring the top legal talent in Family Law and Trusts & Estates.

Announcing Best Lawyers Family Law 2022

Crossing the Line


by Joseph Trotti

Divorce can be difficult, complicated and emotionally exhausting. Divorcing across state lines ups the jurisdictional complexity significantly.

Jurisdiction and Divorce Across State Lines

Trouble at Home


by Brittney M. Miller and James J. Vedder

Decisions about custody and parenting time after a separation or divorce are never simple. Family violence of any kind makes the process all the more complex—and the victim isn’t always the beneficiary.

How Domestic Violence Complicates Custody

Tales From the Crypto


by Gregory Sirico

The economic turmoil of COVID-19 has given cryptocurrency its moment in the spotlight. But are we, and more importantly our banks, ready for it?

Cryptocurrency on the Rise During

Prenuptial Peril


by Laura Wheatman Hill

Prenups aren’t always bulletproof, but there’s hope if you end up exposed in a divorce.

Why Your Prenup Might Not Save You

My Husband Didn’t Want to Stay Married…But He Didn’t Want a Divorce


by Jennifer Billock

Patience—and the law—prevails when an uncooperative partner avoids divorce proceedings.

Divorcing an Uncooperative Partner

My Lawyer Failed Me as an Advocate in My Parents’ Divorce


by Rebecca Rush

Here’s how to ensure your children are respected during a custody battle.

Representing Children in a Divorce

Is This a Once in a Lifetime Opportunity to Refinance Right Now?


by Roy D. Oppenheim

If you wish to stay in your current home and refinance or buy a new home, now is the time

Should You Buy a Home During This Pandemic?

The Generals’ Next War


by Alison Torbitt and Gayatri Joshi

Businesses’ Sense of Corporate Social Responsibility Is Increasingly Driving Long-Term Growth. Here’s How General Counsel Can Best Confront CSR’s Numerous Challenges and Opportunities.

The Generals’ Next War

Trending Articles

The 2024 Best Lawyers in Spain™


by Best Lawyers

Best Lawyers is honored to announce the 16th edition of The Best Lawyers in Spain™ and the third edition of Best Lawyers: Ones to Watch in Spain™ for 2024.

Tall buildings and rushing traffic against clouds and sun in sky

Best Lawyers Expands Chilean 2024 Awards


by Best Lawyers

Best Lawyers is pleased to announce the 14th edition of The Best Lawyers in Chile™ and the inaugural edition of Best Lawyers: Ones to Watch in Chile™, honoring the top lawyers and firms conferred on by their Chilean peers.

Landscape of city in Chile

Announcing The Best Lawyers in South Africa™ 2024


by Best Lawyers

Best Lawyers is excited to announce the landmark 15th edition of The Best Lawyers in South Africa™ for 2024, including the exclusive "Law Firm of the Year" awards.

Sky view of South Africa town and waterways

The Best Lawyers in Spain™ 2023


by Best Lawyers

Announcing Spain's recognized lawyers for 2023.

Flag of Spain

Announcing the 2023 The Best Lawyers in America Honorees


by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

The Best Lawyers in Portugal™ 2024


by Best Lawyers

The 2024 awards for Portugal include the 14th edition of The Best Lawyers in Portugal™ and 2nd edition of Best Lawyers: Ones to Watch in Portugal™.

City and beach with green water and blue sky

The Best Lawyers in Peru™ 2024


by Best Lawyers

Best Lawyers is excited to announce the landmark 10th edition of The Best Lawyers in Peru, the prestigious award recognizing the country's lop legal talent.

Landscape of Peru city with cliffside and ocean

The Best Lawyers in South Africa™ 2023


by Best Lawyers

Best Lawyers proudly announces lawyers recognized in South Africa for 2023.

South African flag

The Best Lawyers in Chile™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms in Chile.

White star in blue box beside white box with red box on bottom

The Best Lawyers in Colombia™ 2024


by Best Lawyers

Best Lawyers is honored to announce the 14th edition of The Best Lawyers in Colombia™ for 2024, which honors Colombia's most esteemed lawyers and law firms.

Cityscape of Colombia with blue cloudy sky above

Announcing the 2024 Best Lawyers in Puerto Rico™


by Best Lawyers

Best Lawyers is proud to announce the 11th edition of The Best Lawyers in Puerto Rico™, honoring the top lawyers and firms across the country for 2024.

View of Puerto Rico city from the ocean

The 2023 Best Lawyers in Portugal™


by Best Lawyers

Announcing the elite group of lawyers recognized in Portugal for 2023.

Green and red Portuguese flag

Unwrapping Shrinkflation


by Justin Smulison

Through the lens of the United States, we take a closer look at the global implication of companies downsizing products while maintaining and often raising prices.

Chocolate bar being unwrapped from foil

Best Lawyers: Ones to Watch in America for 2023


by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

2021 Best Lawyers: The Global Issue


by Best Lawyers

The 2021 Global Issue features top legal talent from the most recent editions of Best Lawyers and Best Lawyers: Ones to Watch worldwide.

2021 Best Lawyers: The Global Issue

IN PARTNERSHIP

Making an Impact


by John Fields

Morelli Law Firm has changed countless lives through its transformative results.

Three men in suits against New York skyline