In a divorce, a charge against a spouse’s share of community property made to reimburse the community for the value of his/her exclusive use of the property after separation (a spouse remains in the family residence) (Watts case). The other credits are reimbursement claims against the community property for the payment of a community debt with separate assets. (credit card or car payments) (Epstein case)
The basic policy of the Court is to encourage litigants to pay their bills by giving them appropriate Epstein credits for payments on community debts from separate property sources. I have a trial starting next Wednesday in San Diego and my client for 2 years have been paying all community debts (health insurance, car insurance, even vet bills) and I had his office manager compile all payments during this time so we can show the Court that since the date of separation, my client has been paying unilaterally without a court order all family/community debts.
The Epstein issues should have been raised, discussed, and resolved at the earliest possible time, by his prior attorney, preferably no later than the time when temporary support was set. Allowing Epstein credit issues to go unresolved until trial creates an additional complex issue for settlement.
Fortunately for my client, I had advised him to keep very detailed documentation since he has the burden of proof regarding the community nature of the obligation, the balance on the date of separation, the post-separation payment and the separate property source of the payment. A folder of all reimbursements must be kept and updated as one spouse pays off community debts.
If a support order has been made such as the temporary order, the order or the stipulation on which the order is based is silent on the subject of credits or reimbursements, the court will presume the payments on Epstein type obligations are not in lieu of support. Said presumption is subject to rebuttal on appropriate showing.
Presentation of Epstein credits: Declarations and supporting exhibits (cancelled checks, bank statements) should be presented to both the Court and the opposing party. As for Watts’s claims, written notice to the other party of the intent to seek such a credit should be made prior to the request from the Court. For this reason, notice should be given as early as possible in the litigation. In the absence of notice, the Court may conclude that the making and granting of the claims are not within the reasonable expectations of the parties. Declarations along with documents should be attached such as written appraisals of the fair market rental value of the property.
These types of credits and claims must be substantiated by documentary evidence so a family lawyer must appropriately advise and provide early notice to her client and the opposing party of their intent so the issue is not litigate in trial.
Any comments or questions, feel free to call my office at 310-601-7144 or email me at [email protected].