Is the "Schmitz" Formula Underwater?

James J. Vedder
Published in MSBA Family Law Forum, Winter 2012-13 (Vol. 21, No. 1). Reproduced with permission. All rights reserved.

This article examines whether the Schmitz formula used to trace nonmarital appreciation in real estate should be modified, completely redone, or left alone. There are both pros and cons to the Schmitz formula.  For instance, the formula seems to work fine, and as intended, when real estate appreciates.  However, when real estate depreciates the formula weighs heavily in favor of the nonmarital interest in the real estate to the exclusion of the marital estate.