ALIMONY VS. MAINTENANCE: WHAT IS THE DIFFERENCE, AND WHY SHOULD I CARE?
Presented by Robert Gradel
HIGHLAND LAKES BAR ASSOCIATION SEPTEMBER 26, 2003
(Continued from Case Law)

Economic Contribution Teaser

ECONOMIC CONTRIBUTION - TITLE ONE, SUBCHAPTER E, FAMILY CODE

THE CLAIM IS CALCULATED BY DIVIDING THE TOTAL ECONOMIC CONTRIBUTION BY THE TOTAL EQUITY IN THE PROPERTY AND MULTIPLYING THAT PERCENTAGE BY THE EQUITY AT THE TIME OF DEATH OR DIVORCE.

Definitions

CEC =Claim for Economic Contribution
PP= Purchase Price
DoDeq = Date of Divorce Equity
DoMeq = Date of Marriage Equity
ECC = Economic Contribution by Contributing Estate
ECB = Economic Contribution by Benefitted Estate

Formula

CEC = DoDeq * ECC/(ECC+DoMeq+ECB)
DoDeq = FMV-Mtg Bal DoMeq = DP - ECC
ECB = PP-DP-Mtg Bal

EXAMPLE ONE:

PURCHASE PRICE OF RESIDENCE: $80K
DOWN PAYMENT: $15K
ORIG MTG BALANCE: $65K
MORTGAGE REDUCTION BEFORE MARRIAGE: $15K
VALUE OF RESIDENCE ON DATE OF MARRIAGE: $100K
MTG BAL ON DOM: $50K
EQUITY IN PROPERTY ON DATE OF MARRIAGE: $50K
MTG REDUCTION DURING MARRIAGE: $30K
VALUE OF RESIDENCE ON DATE OF DIVORCE: $200K
MTG BALANCE ON DATE OF DIVORCE: $20K
NET EQUITY ON DATE OF DIVORCE: $180K