Robert Gradel,
Attorney At Law, Lampasas, Texas
A Lawyer Specializing in Family Law

ECONOMIC CONTRIBUTION FOR DUMMIES
(SPECIFICALLY, FAMILY AND PROBATE LAWYERS)
ECONOMIC CONTRIBUTION - TITLE ONE, SUBCHAPTER E TEXAS FAMILY CODE

(Continued from When Does the Statute Apply?)

WHAT DO I NEED TO KNOW, AND CAN I AVOID DOING ANY MATH?

Most calculations require three numbers:

1. FMV of the property on the date of death or divorce. From this number is subtracted the balance of any liens.

2. FMV of the property on the date of the first contribution. This will usually be the date of marriage if there is an existing note on the property (when they make the first payment on the note), or the day that the pool is built, or the date of the home equity loan.

3. The amount of economic contribution. This will be the amount of the mortgage reduction during marriage or the dollar amount of the added swimming pool or other capital improvement.

No, you cannot avoid doing a little math. You must be able to cipher (add, subtract, multiply and divide - third grade stuff). Here is the formula (do not tune out yet, it is easier than it looks):

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

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.

Let's work some problems:

Economic Contribution for Dummies Continued (Economic Contribution Examples)