through Ethan H.R. Hitchcock, CPA/ABV, ASA, Valuation and also Forensic Services an elderly Manager


By Ethan H.R. Hitchcock, CPA/ABV, AM, Manager | Valuation and Forensic Services

Who it s okay the family Bible

When blood is split apart?

Tell me who gets the family members bible

When 2 grownups lose heart?

Rick Logan, “Family Bible” (written through Jon Brion and also Adam McKay)

In our previous conversation on valuing marital assets titled “Who gets the family Bible? department of Hybrid residential property in Divorce, component I“, us looked in ~ the Brandenburg and also Keeling techniques to quantify the separate and marital materials of actual estate. Currently we will certainly look at the Hosier formula which may be much more applicable than Brandenburg and also Keeling in cases with differing fact patterns.

You are watching: Tell me who gets the family bible

The Hosier formula, gift in Hosier v. Hosier<1>, is additionally referred to as the network Percentage obtain formula. The formula is discussed in the appellate court’s memorandum opinion as follows:

Using a consistent meaning for the expression ″net proceeds,″ the decree start the calculation of wife’s separate interest with the ″actual network proceeds″ – definition the gross revenue price less the sellers’ transaction costs. This number would then be compared to the initial purchase price payment by husband and wife to arrive at a ″net gain percentage,″ the home’s appreciation end the hatchet of the marriage. That appreciation portion would be used to the wife’s different contribution the $19,159, providing it exactly the same return on investment she would have had if she had purchased one more asset precious $19,159 with a comparable appreciation in value.

The trial court changed wife’s different interest v the same percent increase delighted in by the total investment, therefore recognizing wife’s duty in purchasing the asset. The marital interest in the home similarly received the advantage of sector appreciation, hence recognizing the costs connected with holding the investment (a precondition to its appreciation) throughout the ax of the marriage — consisting of debt maintenance, which is mostly interest in the early on stages the the amortization schedule, as well as durational prices like insurance money premiums and real heritage taxes. In this way, the attempt court’s methodology prudently well balanced the gaue won expectancies related to resources acquisition prices (supported completely by wife’s separate interest) and also asset retention costs (supported totally by marital interests).<2>

The Hosier formula can be presented as follows:

NG% = NP / PPSI = SC x NG%MI = NP – SI – D

Where:NG% = Net acquire percentageNP = network proceeds, calculated as gross sales price much less transaction costsPP = purchase price of topic propertySI = different interest in subject propertySC = different contribution to gain subject propertyMI = Marital interest in topic propertyD = net liabilities ~ above the topic property

The Hosier formula, as debated above, recognizes the prominence of the separate contribution come the acquisition of the topic property and applies the percentage boost of the total investment come the separate contribution. Additionally, the Hosier formula allocates value to the marital attention for the cost of retaining the subject property, also when the debt balance connected with the subject building increased, i m sorry is especially valuable in an era of zero interest-rate policies and interest-only loans.

The difference in between Brandenburg, Keeling, and also Hosier can be depicted by the complying with example. Mr. And also Mrs. Smith are married top top January 1, 2XX1, and buy a residence that day for $200,000. Mrs. Blacksmith puts down $20,000 and also the pair takes the end a mortgage for the continuing to be $180,000. A few years later, the Smiths make an addition on the house and also take out an additional $50,000 come finance it. Several years later, Mr. Smith goes to Washington and refuses to leave, leading to the couple’s divorce. When the pair separates on December 31, 2X10, the house has a fair market value of around $400,000 and also the mortgage has a primary balance the $200,000. Using the Brandenburg, Keeling, and also Hosier formulas, the value of the separate and marital components of the couple’s real estate is together follows:


Under the Brandenburg formula, the mortgage balance increased during the marital relationship so the marital donation is classified together negative. Consequently, the whole value that the residence would it is in Mrs. Smith’s property despite the fact that the couple were equally responsible for the mortgage throughout the term of your marriage. Utilizing the Keeling formula, Mrs. Smith’s initial contribution of $20,000 has grown through 0% in 10 year while the value of the house doubled, leading to a separate interest the $20,000 and also a marital attention of $180,000. The Hosier formula uses the net obtain percentage ~ above the home of 200% come Mrs. Smith’s initial contribution of $20,000, leading to a separate interest of $40,000 for Mrs. Smith at the date of separation and also a marital attention of $160,000.

As the examples above show, the calculation of separate and also marital interests in genuine estate can result in a wide variety of values relying on the methodology employed. As necessary it is imperative that the gaue won expert and attorney work-related together to recognize the appropriate technique given the details facts and also circumstances, venue, and also the relevant situation law.

<1> Hosier v. Hosier, 2007 Va. App. LEXIS 62, *1-2, 2007 WL 506081 (Va. Ct. App. Feb. 20, 2007).

See more: Rob Schneider Yelling “ You Can Do It Rob Schneider Movie Quotes

<2> Hosier v. Hosier, 2007 Va. App. LEXIS 62, *1-2, 2007 WL 506081 (Va. Ct. App. Feb. 20, 2007), 4-5.