Show Notes:

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Drahos Formula (as modified by subsequent case law):

Where “A” = appreciation of the property during the marriage;Where “B” = the appraised value of the property as of the date of the marriage;
Where “C” = the community’s contributions to principal, the value of the community’s lien is:

C + [C/B X A]

Valento Formula (used when property depreciates in value):

“When separate property depreciates but positive equity remains, a straightforward application of the logic of Barnett requires the court to recognize a community lien in an amount equal to the reduction in principal indebtedness attributable to the community contribution. We hold that this is the proper approach in such cases.” Valento v. Valento, 225 Ariz. 477, 240 P.3d 1239 (Ariz. App., 2010)
“[W]hen equity is negative, the community lien can be valued as follows: C-[C/B x D]; where D = depreciation in value of the property during the marriage, B = value on the date of marriage, and C = community contributions to principal or market value.” Valento v. Valento, 225 Ariz. 477, 240 P.3d 1239 (Ariz. App., 2010).

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