Dividing assets is often one of the most complicated parts of a divorce. Assets go into two different buckets — one is marital property, and the other is separate property. The marital assets are equitably divided between the spouses, while the respective spouse retains their separate assets. Unless there is a pre- or post-nuptial agreement in place, the couple divides their marital property in an equitable manner. This division need not be a half-half split, nor does the value of assets need to be equally split if one spouse contributed a more significant amount of assets or income to the marriage.
Before dividing the assets, there is a process that categorizes the property. Generally, marital property is assets accumulated after the wedding, but gifts and inheritance received during the marriage remain with the individual.
How it works
Amidst the process of valuing the assets, a spouse may also file a reimbursement claim to take back marital funds spent on one or more separate properties. For example:
- The couple may have used marital funds for mortgage payments or capital improvements of a home previously owned by one of them.
- One spouse may have brought credit card debt to the marriage, which was paid using both spouses’ money.
- There may have been refinancing of a secured loan after the marriage tied to an individual or separate property.
These reimbursement claims can be made based on fairness, equity or doing the right thing. The goal is to assign a specific monetary value. Judges can then rule whether the claim is valid and what the actual amount will be. The property is then get categorized as marital property.
Using individual funds on marital property
Conversely, a spouse may also recoup individual assets used to benefit community property. For example, there may have been a time when the couple spent one spouse’s inheritance on a home they bought together. This could be by choice or due to the necessity of the other spouse being unable to pay bills because they were out of work. It would be a reimbursement against the marital property.
What if no marital property was involved?
A spouse may have used their individual assets to pay toward an asset owned by the other spouse and for their sole and separate benefit. The spouse who paid could ask the court to categorize the claim’s amount as individual property.
These are complex issues
Those with questions about reimbursement claims, dividing a marriage’s assets, understanding what is fair and equitable, or protecting their individual property can consult with an experienced family law attorney. Even if the couple chooses not to go to court, they can still have an attorney effectively negotiate on behalf of the client.
