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Can there be reimbursement for contributions to acquire property?

On Behalf of | Mar 10, 2023 | Divorce |

In California divorces, property division might be viewed in the context of who gets to keep a marital home, who gets automobiles, how jewelry and other assets will be split and what happens to items of sentimental value. However, property encompasses other aspects of the case as well.

For many, the items were not purchased by one of the spouses alone. They might have shared the cost. It is possible that the appreciation in value came through the effort of the person who did not pay for it. Under these circumstances, it is important to know about reimbursements.

Understanding how reimbursements will be factored in during a divorce

When the court assesses contributions, it will consider down payments, if payments were made to improve a property and payments that lowered the principal of a loan that was used to acquire a property or to improve it. It will not include payments made for the interest on the loan, to maintain the property, insure it or pay the taxes.

For example, if the couple owned a home and one spouse had savings or income to buy it, the other might have contributed in any or all the ways listed above. That could lead to reimbursements during the divorce. For some, it might be preferable to sell it and divide it in a fair manner. In others, the person who is keeping the property might pay the other person based on their contributions.

For community property, the reimbursement can be avoided if there was a written waiver saying they do not have a right to it or has put it in writing in some way that is comparable to a waiver. Apart from that, they can be reimbursed based on how much they contributed.

With separate property, they can be reimbursed if they made contributions to the spouse’s separate property after they were married. If a home was owned by one person before the marriage and it is separate property, the other person contributing to its improvement can lead to being reimbursed.

To try and reach a fair property split, legal assistance is imperative

Calculating how much the reimbursement should be can be complicated. There may also be disputes regarding the level of contribution that was made, if the property is separate or community, and if one side wants to keep it but the other wants it to be sold. In these cases, there can be significant sums at stake.

With this type of property division dispute, it is important to have professional advice, regardless of the perspective. Contacting those experienced in these cases can provide information, guidance and help with trying to reach a settlement or going to court.


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