During a California divorce, one spouse may be entitled to be reimbursed when the other spouse has exclusive use of community property or when one spouse makes payments on a community debt.
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You may be entitled to a reimbursement if, during your divorce you used your separate property to pay on a community debt or if your spouse has exclusive use of a community asset. Two of the most often mentioned are Watts Charges and Epstein Credits.
These are charges made to one spouse’s share of community property to reimburse the community for the value of their exclusive use of property after the date of separation. When one spouse has exclusive use of a family home or vehicle, the community is entitled to a reimbursement for the value of this use. The reimbursement comes in the way of a “charge” against their portion of the community property they are to receive.
Claims for Watts charges, for reimbursement to the community for post-separation use of community assets, are generally disfavored by the court unless the spouse seeking credit has given prior written notice to the other spouse of their intent to seek such a credit. Claims will ordinarily be considered retroactive only to the date of such actual written notice of the claim.
These are credits that a spouse is to receive from community property for the payment of a community debt with their separate assets. When one spouse pays on a community loan or a community credit card debt they are entitled to reimbursement from the community. The spouse who wants to claim Epstein credits has the burden of proof regarding the community nature of the obligation, the balance on date of separation, the post-separation payment and the separate property source of the payment.
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