How contributions to acquiring property are assessed in a divorce

On Behalf of | Sep 22, 2022 | Divorce |

California divorces will have many issues to iron out. One of the most complicated can be property division. This may be perceived as boiling down to a marital home, automobiles, bank accounts and what the couple owned together.

However, married couples generally share in the cost of acquiring certain properties and will have questions about reimbursements as part of the divorce. The law addresses this complex situation and knowing what it says and means is essential to achieving a fair outcome.

What is calculated in contributions to property acquisition?

If a couple purchased a property and both parties contributed to its acquisition, this will be analyzed to determine if reimbursement is appropriate and how much it should be. For example, when purchasing a home, there will generally be a down payment. That is considered with the potential for reimbursement. The same is true for paying to improve the property or to reduce the loan that was taken out to finance it. It will not include interest payments. Nor will it include maintenance, paying for insurance or taxes.

Community property will have been acquired during the marriage. If one party has crafted a written waiver eliminating their right to receive reimbursement, they will not be reimbursed. If they have not done that, they will receive the amount they contributed based on its separate property source like a bank account they had before the marriage. This will not have interest or be altered in any way based on inflation or other financial changes. If a person contributed their separate property to the other party acquiring separate property while they were married, they will also be reimbursed unless there was a waiver.

When seeking or fighting against reimbursement, help can be critical

Sifting through property and determining how it will be divided in a divorce can be difficult enough without thinking about one spouse reimbursing the other for their contributions. Since properties will hold financial, personal and sentimental value, this can be the source of debate and acrimony.

In some cases, the sides can negotiate and come to an agreement. A potential way to avoid a long-term dispute is to trade one property for another. Still, with financial matters and the potential for both sides to have their own perception of what is a fair settlement, it is imperative to have advice with navigating this difficult terrain. Calling professionals who are well versed in all areas of family law can provide advice with the case.