In today's depressed real estate market, I often encounter the situation where a spouse had a non-marital interest in the marital homestead at the time of marriage; but at the time of divorce, the house is upside down. So the question arises as to whether or not the spouse who formerly had the non-marital interest is entitled to any kind of credit in the overall divorce property settlement.

The answer is no. The burden of proof is on the party claiming a non-marital interest to trace that interest to a currently-existing asset. If your current homestead is as far as you can trace your non-marital interest, and there's no longer any equity in your homestead, then you're just out of luck on that issue. It's that simple.