The Moore / Marsden calculation is not an arguable calculation but a rule / law that was set forth in the two cases below. The formula is used to compute the community’s pro tanto interest in a property that was purchased with community funds.
[S.F. No. 24172. Supreme Court of California. October 30, 1980.] In re the Marriage of LYDIE D. and DAVID E. MOORE. DAVID E. MOORE, Appellant, v. LYDIE D. MOORE, Respondent
In re the Marriage of NANCY E. and SULLIVAN S. MARSDEN. NANCY E. MARSDEN, Respondent, v. SULLIVAN S. MARSDEN, Appellant.
Well when a couple files for divorce they immediately start claiming property as their own "separate property" aka items that belong to them and not their spouse. For instance lets say you purchased a couch long before marriage. Since that purchase was made before marriage your spouse has no community interest in this couch, so it is your separate property. But what if this couch was purchased before marriage with six months interest free financing? Then after only three payments/months you married your spouse and the final three payments where made during your marriage? This couch essentially becomes 50% separate property and 50% community property.
More often than not you won't get this technical in divvying up the marital assets, but you will more than likely argue over a home bought before marriage with payments made on that home once or after you became married. The Moore Marsden calculation is designed to split the property fairly between each spouse. Giving both the community and separate property fair values. Now "Fair Values" is an argument all on its own, but these two cases have defined how fair is determined for now.
Before we get to an example calculation I would like to go over the Moore Marsden Formula. Basically we need to assign a percentage to the Community and Separate Properties. To do this you use this formula.
( (PrincipalAtMarriage - PrincipalAtSeparation) / PurchasePrice ) = CommunityPropertyPercent
( (PurchasePrice - (PrincipalAtMarriage - PrincipalAtSeparation) ) / PurchasePrice ) = SeparatePropertyPercent
( (PrincipalAtMarriage - PrincipalAtSeparation) * CommunityPropertyPercent) + ( (FairMarketAtMarriage - FairMarketAtSeparation) * CommunityPropertyPercent ) = CommunityPropertyTotal
( (PrincipalAtMarriage - PrincipalAtSeparation) * SeparatePropertyPercent) + ( (FairMarketAtMarriage - FairMarketAtSeparation) * SeparatePropertyPercent ) = SeparatePropertyTotal
Now Lets get to a simple example calculation. Most sites you visit will use example numbers like $450,645 as a purchase price for a home. Although that number might be a more realistic purchase price, I am going to use $100,000 to keep the calculations simple.
First you need to know at least these 5 different values of the property in question.
I chose these numbers to make the math easy to follow. Lets get started.
First lets find the principal pay down on the mortgage during marriage. This is simply $10,000 minus $1,000 which gives us $9,000.
Next lets get the appreciation on the home. Which is the purchase price minus the fair market value at date of separation. $100,000 minus $115,000 gives us $15,000. Now we need to figure out how much of that appreciation occurred before marriage.