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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Reimbursements for use of community property or payments on community debts are called Watts Charges and Epstein Credits. Although there are other classifications for reimbursements, these are the two most common to a divorce action.
You may be entitled to divorce reimbursements if you made any of the following payments during your marriage:
Reimbursements can come in the form of Watts Charges. which are charges one spouse incurs after date of separation for their exclusive use of community property. When one spouse has exclusive use of a family home or vehicle, the community will be entitled to reimbursements for the value of this use. The reimbursements come in the way of a “charge” against their portion of the community property they are to receive.
Claims for Watts charges, for reimbursements 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.
Reimbursements can be 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 a credit 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.
The community has a right to divorce reimbursements when a spouse uses community property to pay his/her separate property obligations.
Child Support Payments
One spouse can request reimbursements when the other spouse is using community property to makde child support payments or spousal support payments. The paying spouse’s obligation is a separate debt resulting from from another relationship, prior or during marriage.
One Spouse’s Tort Liability
Community property used to satisfy one spouse’s tort liability or student loan debt.
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