Determining which spouse gets certain sums of money from real estate owned by the husband or wife during the marriage is controlled by the Brandenburg case (or a similar equitable formula as discussed by the Brandenburg court). 

In Brandenburg, the wife sought review of the judgment of a Kentucky trial court (Kentucky), which held that three parcels of property were the husband’s sole property. The wife argued that the trial court applied the wrong formula when it apportioned the property and that she was entitled to the value of a portion of the property.

The parties were divorced and the trial court apportioned the property. The court held that the trial court was wrong when it declared that the three properties were totally nonmarital (in the husband’s favor) because the wife was entitled to a portion of the property. Portions of the mortgages were paid off during the marriage and the value of the property increased during the marriage. Thus, a portion of the properties was marital property of which the wife was entitled to her share under Kentucky marital property law. The court set forth the following formulas: nmc/tc X e = nonmarital property, and mc/tc X e = marital property, where “nmc” was the non-marital  contribution, “mc” was the marital contribution, “tc” was the sum of nonmarital and marital contributions, and “e” was equity in the property at the time of distribution. The judgment regarding the apportionment of marital property was reversed and the case was remanded.

The court discussed that there is to be established a relationship between the nonmarital contribution and the total contribution, and between the marital contribution and the total contribution. These relationships, reduced to percentages, should then be multiplied by the equity in the property at the time of distribution to establish the value of the non-marital  and marital properties.

With that in mind, the court then went on to define each important area:

Nonmarital contribution (nmc) is defined as the equity in the property at the time of marriage, plus any amount expended after marriage by either spouse from traceable non-marital  funds in the reduction of mortgage principal, and/or the value of improvements made to the property from such non-marital funds.

Marital contribution (mc) is defined as the amount expended after marriage from other than non-marital  funds in the reduction of mortgage principal, plus the value of all improvements made to the property after marriage from other than non-marital  funds.

Total Contribution (tc) is defined as the sum of nonmarital and marital contributions.

Equity (e) is defined as the equity in the property at the time of distribution. This may be either at the date of the decree of dissolution, or, if the property has been sold prior thereto and the proceeds may be properly traced, then the date of the sale shall be the time at which the equity is computed.

After providing all of the above definitions, the court determined that the formula to be utilized is:

nmc/tc X e = nonmarital property

mc/tc X e = marital property

However, importantly, the court went on to say that even though the court adopted this formula that this Court will not disturb or invalidate other procedures utilized by the lower courts in arriving at an equitable division of property as long as the relationship between the contributions of the parties is established.

This language makes it clear that as long as the court utilizes a formula that results in the court arriving at an equitable division of the property, regardless of the formula used, that such a decision would likely be appropriate. 

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