The Division of Property Concerning Reimbursements

In the California Family Code, Division 7, Part 7, deals with the division of property and reimbursements. Section 2640 defines the term “contributions to the acquisition of property.”

In the division of the community estate under this division, unless a party has made a written waiver of the right to reimbursement or has signed a writing that has the effect of a waiver, the party must be reimbursed for the party’s contributions to the acquisition of property of the community property estate to the extent the party traces the contributions to a separate property source. The amount reimbursed does not include interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division.

In addition, a party is required to be reimbursed for the party’s separate property contributions to the acquisition of property of the other spouse’s separate property estate during the marriage, unless there has been a writing or a written waiver of the right to reimbursement. The amount reimbursed does not include interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division.

Section 2641 defines the term “community contributions to education or training.” The community must be reimbursed for community contributions to education or training of a party that substantially enhances the earning capacity of the party. The amount reimbursed is to be with interest at the legal rate, accruing from the end of the calendar year in which the contributions were made.

A loan incurred during marriage for the education or training of a party is not to be included among the liabilities of the community for the purpose of division pursuant to this division but must be assigned for payment by the party. In addition, the reimbursement and assignment required by this section are to be reduced or modified to the extent circumstances render a disposition unjust, including three specified circumstances.

Reimbursement for community contributions and assignment of loans pursuant to this section is the exclusive remedy of the community or a party for the education or training and any resulting enhancement of the earning capacity of a party. This section is subject to an express written agreement of the parties to the contrary.