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 reimbursements if, during your divorce you used your separate property to pay on a community debt. Reimbursements are also available to you if your spouse has exclusive use of a community asset. Two of the most often mentioned reimbursements are known as Watts Charges and Epstein Credits.
Reimbursements can be in the form of Watts Charges. Watts Charges is the money one spouse would owe to the community (you and your spouse) for the exclusive use of property after the date of separation. As an example, when one spouse has exclusive use of a family home or vehicle, the community is entitled to a reimbursement. The community is reimbursed for the spouse’s use of the community asset. The reimbursements comes in the way of a “charge” against their portion of the community property they are to receive.
Claims for Watts charges are generally disfavored by the court unless the spouse seeking a reimbursement has given prior written notice to the other spouse. Claims will ordinarily be considered retroactive only to the date of such actual written notice of the claim.
Epstein Credits are another form of reimbursements. These reimbursements are credits that a spouse is to receive, from community property, for the payment of a community debt using 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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