Can a Third Party Claim a Property Interest in Marital Property?
It is not uncommon for family members to financially assist a
married couple in purchasing a home. However, legal questions may arise
regarding property ownership and the division of assets in the event of a
divorce.
One scenario is when a parent or third party contributes to the down payment of a marital home and/or is listed on the deed and/or mortgage. Under Georgia law, the critical question is whether the parent retains a financial interest in the home or whether their contribution is considered a gift to the couple.
Understanding Property Interests in Georgia
Property division in Georgia follows the principle of equitable
distribution. This means that marital property is divided fairly, though not
necessarily equally, based on the circumstances of the case. Determining
whether a parent retains an interest in a marital home depends primarily on the
intent behind their financial contributions and whether they intended to retain a property interest when and if their name was added to
the deed and/or mortgage.
If there is no written agreement explicitly stating that the parent
expects reimbursement or retains an ownership interest, courts will likely
presume that the contribution was a gift. This presumption aligns with Georgia
case law, which has repeatedly held that financial assistance from family
members in acquiring a marital home is typically intended as a gift to the
married couple unless evidence suggests otherwise.
Factors Courts Consider
When deciding whether a parent or third party has a legal claim to the marital home, Georgia courts analyze several factors, including:
·
Intent
of the Parties
·
Written
Agreements
·
Use of
the Property
·
Timing
and Circumstances
Gift or Ownership Interest?
If the Contribution Was a Gift
Georgia courts have consistently ruled that when a parent provides financial support toward the purchase or improvement of a home, it is generally considered a gift unless there is clear evidence to the contrary. This can be intended as a gift to only one spouse, but is most commonly found to be a gift to the married couple.
If the Parent Intended to Retain an Ownership Interest
Should evidence suggest that the parent intended to maintain a
financial interest in the property, the parent may have a claim to a portion of
the equity. If the court finds a parent intended to retain an ownership
interest, the parent would be considered an indispensable party, requiring formal joinder in the case to determine each party's
ownership interest.
Based on Georgia law, courts are inclined to view a parent's
contribution toward the marital home as a gift to the husband and wife. As a
result, the home's equity would be divided between the spouses as part of the
marital estate.
Only if compelling evidence demonstrates that the parent intended to retain an ownership stake would the court consider adjusting the division of property. Unless the a party provides evidence that the parent has a vested interest in the home, the property will likely be divided equitably between the husband and wife, with no portion allocated to the parent.