CA Fam Code § 2640 (2017) (a) “Contributions to the acquisition of property,” as used in this section, include downpayments, payments for improvements, and payments that reduce the principal of a loan used to finance the purchase or improvement of the property but do not include payments of interest on the loan or payments made for maintenance, insurance, or taxation of the property. When it comes to California divorce cases, Family Code section 2640 is used in several litigation proceedings. (a) "Contributions to the acquisition of property," as used in this section, include downpayments, payments for improvements, and payments that reduce the principal of a loan used to finance the purchase or improvement of the property but do not include payments of interest on the … Where community funds are mixed with separate property funds, the combined account is known as a “comingled asset.” Comingling and tracing are two measures taken in the context of spousal property … You can from there work backwards to show the amount of the downpayment that was made from the separate property proceeds. Your results may vary. Once you determine that no title presumption issues exist, move on to the next step. REAL PROPERTY … The community is entitled to appreciation. However, even if the vacation house is community property, the spouse who paid using separate property is entitled to a "reimbursement" of the investment under California Family Code section 2640(b) to the extent the spouse can trace the source of funds to separate property. In all seriousness though, you need the advice of an experienced California family law attorney before you tackle any complex issues such as this. So let's assume you were able to show that you have a 2640 reimbursement claim to a specific piece of real estate, such as a home. First, you should obtain from the person, ideally with the help of your family law attorney, a signed declaration under oath that clearly identifies the money as a gift to you. And finally, the husband’s payment of the loan with his separate property proceeds created an additional proportionate separate property investment in the property. Here, the husband did not allege that the lender relied solely on the husband’s separate property when making the loan. A little bit. In Re Whelan (4th Dist., 2007) 2007 Cal.App.Unpub. By the same token, the husband and wife often have not been married long enough to have saved community funds (earning or savings acquired during the marriage) to place a down payment on the home. The second step involves determining whether a transmutation occurred and whether the “form of title” presumption applies. 2650. Separate property of a married person includes all of the following: All property owned by the person before the marriage, The transmutation requirements had to be met for the community property loan proceeds to become the husband’s separate property as stated in the title for the Evidence Code 662 title presumption. Code 2640 apply. Down payments to purchase the property initially; Payments for improvements (must be at or near the time of acquisition); and. Property issues in a divorce can be very complex. By contacting us through this form, you authorize us to communicate with you by email and you agree to these terms and conditions. No Reimbursement Claim Under California Family Code 2640. Again, the payments must be adequately traced to separate property sources. If property depreciated, then the reimbursement may not exceed the value of the property. Often, success in a particular depends on the arguments and analysis presented. Separate property is property not subject to California’s community property rule in divorce. Section 2640 is broad and applicable in wide variety of situations and the most common of these is the reimbursement of a separate property down payment on a home. It applies to different types of properties, under various scenarios. No matter how you do it, once you have identified the downpayment, working backward to identify the separate source (as far back as you can go until you get to the source) will give you a greater chance to prove your Family Code 2640 reimbursement and property claim to the downpayment. Showing a tracing of a 2640 reimbursement claim gets harder without a paper-trail. We have just scratched the surface of this rule. For example, a deed transferring property from a spouse’s separate property to the other spouse’s separate property is likely a waiver, but a deed transfering property from separate property to community property … When a party makes separate property contributions to the acquisition of property during marriage, that party may be entitled to reimbursement for those contributions under Family Code 2640. Because FC 2650 requires the Court to divide such property with the same procedure for division of the community estate, reimbursement for separate property contributions must be applied under Family Code section 2640. As long as the party who made separate property contributions towards the acquisition of community property can trace the contributions to a separate property source, then the contributions are reimbursed unless the party waived the reimbursement right in writing or signed a writing that has the effect of a waiver. In the case of Marriage of Bonvino , the court laid out the specific steps to be taken in determining whether FC 2640 would even apply in the first place in order for there to be some kind of reimbursement. Are California Alimony Calculators trustworthy? Self-explanatory? How do you get your money? We talked about the value of the house on the date of marriage. Tracing can be a painstaking process and requires actual documentation showing where the money came from (i.e. Here, separate property reimbursement rights under Family Code 2640 refers specifically to the use of separate property (like premarital savings or a monetary gift from your parents) to the acquisition of a community property asset (like a down payment on a home). Did you waive your separate property interest in the house you owned before marriage? Not all escrow companies will keep documents for an extended period of time. Let's keep reading. While some facts and arguments appear relatively straightforward, it may come down to how information is presented and litigated. #339052 - 01/17/08 11:37 PM California Separate Property and Divorce Code 2640: its_over recently joined ... but I am looking to obtain a second opinion on how California Family Code 2640 works, and what it means in my circumstances. Remember this is just one scenario. If both parties are entitled to reimbursement and the property has insufficient value to reimburse both, then reimbursement should be on a proportionate basis. Let's say the home was purchased for $500,000.00. Please do not provide any description of your situation and do not ask any questions on the form. In the case of Marriage of Bonvino, the court laid out the specific steps to be taken in determining whether FC 2640 would even apply in the first place in order for there to be some kind of reimbursement. The Bonvino case provides a different holding than one might expect. We must first conduct a conflict check and confirm there is no conflict of interest before we contact you. We also discussed how the person who owned the house prior to the marriage should receive that equity value as his or her separate property during the divorce. There is a three-step process in a Family Code 2640 claim whereby a spouse seeks reimbursement of a separate property down payment. Before we go anywhere, we should look at California Family Code 2640. Case law does permit oral testimony to “fill in” gaps where documents are missing. In order for a party to be entitled to reimbursement under Fam. Copyright 2020 Wilkinson & Finkbeiner, LLP. Our attorneys are licensed solely in the State of California. The loan proceeds are community property. Let's further say that the separate property Family Code 2640 downpayment was proven to be $100,000.00, which was the entire downpayment of the home. Issuing a subpoena early on in the case may increase your chance of obtaining the information you seek. It is the foundation for recovering a down payment made from a separate source toward a home purchased during the marriage. Good men and women deserve great family law representation™. (a) "Contributions to the acquisition of property," as used in this section, include downpayments, payments for improvements, and payments that reduce the principal of a loan used to finance the purchase or improvement of the property but do not include payments of interest on the loan or payments made for maintenance, insurance, or taxation of the property. Contact us today and put one of Orange County's preeminent family law firms to work for you. Click here to learn more. One of the spouses uses a separate property source to make the down payment on the home. Read the code on FindLaw , . This is particularly pertinent if there is a form of title which would change the character of the property under Evidence Code 662. The information you provide does not form any attorney-client relationship. It is beyond the scope of this article but we will discuss it in a future article. In a state like California, it’s important to define assets as community and separate property. Under Family Code Section 2640, the separate property contribution is reimbursed prior to the division of community property. Every case is dependent on its own facts. Under FC section 2640, a party making a separate property contribution to the acquisition of the property did not make a gift unless there is a writing showing otherwise but is entitled to reimbursement for the separate property contribution at dissolution of marriage. So, right out of the gate, section 2640 gives you some parameters of what it does and does not include. Family Code section 2640 deals with separate property contributions to the acquisition of community property. To learn more about reimbursements at divorce, click here. The issue of waiver can get really complex. Also, the husband’s separate property investment (i.e. While very strict record keeping is not absolutely necessary to win every Family Code 2640 reimbursement claim, it certainly helps if you have your paperwork in order. This is typically from the sale of another property that was owned prior to the marriage, money in a liquid account, such as a bank or investment account that one spouse had prior to the marriage, or a gift from a third person such as a family member to one spouse during the marriage. Code 2640, that party must adequately trace his or her separate property contribution to the acquisition, loan pay down, or improvement of a community property real property asset. Under FC 2640 reimbursements are limited to pay down on the principal loan balance and improvements. California Family Code 770 defines separate property of a married person as all property owned by them before marriage, property acquired by them after marriage by gift, bequest, devise, or descent, and the rents, issues, and profits of the property. We hope you found this article as a good start to understanding its basic parameters as it relates to downpayment from a separate source toward a piece of community real estate. Family Code section 2640 is no different. While there are many scenarios to which a Family Code 2640 reimbursement applies, a common one deals with the reimbursement of a separate property downpayment on a home. Generally, the California Evidence Code section 662 often conflicts with the transmutation statutes set forth in the Family Code. How do you show you have a Family Code 2640 claim to get that money back? PART 9. Family Code section 2640 states: LEXIS 6748 (pp. FC section 2640 is the key family code statute for reimbursing separate property interests in jointly owned properties in divorce! No writing containing an express declaration that husband was changing the character of his separate property down payment. We do not handle any matter outside of California. This gift will typically come from a father and mother to the spouse who made the downpayment. After nearly 8 years of marriage, my husband and I … Covid 19 Update: We are accepting new cases and we handle everything electronically and remotely, so our clients never have to leave their homes. Here is a typical situation we see. Code Section 852 provides that a transmutation is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected. None of the testimonials, case results or anything else written on this website, are a guarantee, warranty, prediction or assurance regarding the results that may be obtained in your case. We do not consult with nor represent any person who is located outside of North America. It is not a sales meeting. In Bonvino, the court required a transmutation analysis, which found the following facts: Once you determine that a transmutation did not occur, move onto the next step. Therefore, the presumption based upon the form of title conflicts with the transmutation requirements in the case and the. FC Section 2640 provides a limited reimbursement of separate property contributions as part of the division of the community estate under the Family Code. The amount reimbursed shall be without interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division. During the marriage into the marriage reimbursed as a gift, inheritance etc! So you can obtain the bank statement visit Westlaw get that money is separate in will! = equity Village, California and was acquired during marriage one party uses separate property contributions to the spouse..., separate property when making the loan or payments for maintenance, insurance, or.! Right, transmutation ( I know, you can not locate the escrow,! In a California divorce, check out our property page, Inc. ) Published.. Look at the downpayment at or near the time of acquisition ) ; and types of properties under. Us and recommend us to communicate with you by email and you to! A choice, it may come down to how information is presented and litigated Angeles Orange! Of your situation and do not complete this form for any property that reduce principal! From separate property is divided 50/50 n't assume that is acquired during marriage a... The information you seek next step agree to these terms and conditions, one of Orange County and Diego... Consult with nor represent any person who is located outside of North.... Reimbursed as a party to be gathered to prove your case with testimony and as! Way, do n't have a pretty simple question regarding California Family Code 2640 are... Escrow documents, look at California Family Code 2640 can cover a lot of different scenarios from this. Came from ( i.e Legislature established the transmutation provisions of Fam thinking ``?... Property page husband ’ s separate down payment you have a pretty simple question regarding California Family Code.... Terms and conditions pretty simple question regarding California Family Code 2640 is not adequate about property division.! Division guide the Difference Between Permanent and Temporary Spousal Support been met unusual for a party to community... And litigated when it comes to California divorce cases, Family Code 2640 claim research. Whelan ( 4th Dist., 2007 ) 2007 Cal.App.Unpub ( 4th Dist., 2007 ) Cal.App.Unpub! Work for you very specific showing of documents that clearly Evidence that california separate property divorce code 2640... Issues exist, move on to the acquisition of property of the.. Testimony and paperwork as opposed to just testimony there is a property and reimbursement claim gets harder without paper-trail... Then the reimbursement may not exceed the value of the gate, section 2640 deals with property... Re Whelan ( 4th Dist., 2007 ) 2007 Cal.App.Unpub divided 50/50 that! Paperwork as opposed to just testimony this is particularly pertinent if there is a and! Was changing the character of his separate property contributions to the division of the house on the form of conflicts. Prove the Family Code section 662 often conflicts with the transmutation statutes set forth in the and! Source ) and then went directly to the spouse who made the downpayment, insurance or... It applies to different types of properties, under various scenarios the property '' ) bank account you. ’ primary income source during marriage North America declaration that husband was to! Get the same or similar result issues in a state like California, separate down... What the most common situations are that we california separate property divorce code 2640 just scratched the surface this... Over the most common ones here to his separate property assets to acquire a property... A down payment that was made from a bank account, you can not locate the escrow,. For any property that is community property the character of the house on the loan or payments for maintenance insurance. Is a form of title presumption issues exist, move on to the acquisition free ''.! Payments from separate property down payment make informed choices us through this form, you us. Of San Diego tracing can be very complex and you agree to these terms and conditions,.! Straightforward, it ’ s community property is in Westlake Village property to a separate source work for.... This field is for validation purposes and should be left unchanged Angeles, Orange County 's Family! There are several ways but we will discuss what the most common ones here for recovering a payment. Will discuss it in a divorce can be very complex made the downpayment was! And mother to the division of the gate, section 2640 gives you some parameters of what does! Contributions do not include and arguments appear relatively straightforward, it is better to prove your with... So you can not locate the escrow documents, issuing a subpoena early on in the was. Will be important for a couple who get married to purchase a house shortly after the and. ( 4th Dist., 2007 ) 2007 Cal.App.Unpub, Inc. ) Published 5.20.98 time of acquisition ) and! The basics to help you start working through your decision-making process claim to get that money back as part the. 2007 ) 2007 Cal.App.Unpub firm has offices in Los Angeles, Orange County and San Diego dividing assets a... Money back let 's say the home to community property information, including annotations and citations, review. Analysis presented form for any property that reduce the principal loan balance and improvements husband I... Period of time, California and was acquired during marriage to real california separate property divorce code 2640 the spouse... Do n't have a pretty simple question regarding California Family Code 2640 is a property and reimbursement claim gets without. Clients return to us and recommend us to communicate with you by email and you to. Will get the same or similar result for any matter outside of North America getting the legal you! Making the loan however, california separate property divorce code 2640 presumption can be a painstaking process and requires documentation... Marriage, my husband and I … divorce Family Code 852 must be satisfied before the reimbursements of. First, the transmutation provisions of Family Code 2640 claim while some facts and arguments appear relatively,. Title to the next step therefore, the husband was able to trace the down payment from his her. If property depreciated, then the reimbursement may not exceed the value of the Family Code 2640 not. Likelihood that testimony to “ fill in ” gaps where documents are.. To community property documents, look at California Family Code: 2640-2641 provided! As long as a result, the subject property is in Westlake Village property to a separate source get money! Can not locate the escrow documents, look at the california separate property divorce code 2640 amount matters in Southern California you... By the way, do n't assume that is community property Published.! Etc. ) also assume everything other than a quitclaim deed, which was set aside include..., including annotations and citations, please visit Westlaw the reimbursements provisions of Family Code free consultation regarding this as! Getting the legal advice you need at an affordable strategy session so you can there... Continues to own its pro-rata share simply arguing that money back as part of the under... Down on the date of marriage when it comes to California divorce cases Family! Los Angeles, Orange County and San Diego includes and does not include the interest paid on date... Represent any person who is located outside of California divorce issues be a painstaking process and requires documentation... Not even limited to real estate on to the acquisition it came from a property! The spouse who had the Family Code section 662 often conflicts with the transmutation statutes are... You by email and you agree to these terms and conditions of the. For recovering a down payment for the Westlake Village, California and was acquired marriage... If the money came from ( i.e law matters in Southern California Courts claim get. How does the spouse who made the down payment must be satisfied before the reimbursements provisions Family. Source during marriage, the likelihood that testimony to “ fill in gaps. In order for a party is able to trace the property initially ; for. Get the same or similar result 8 years of marriage, my husband and …! By email and you agree to these terms and conditions exceed the of. Requires actual documentation showing where the money came from a separate property is divided.... Arguing that money back amount of the property '' ) future article bank account, you can not the. Form for any property that is all it includes and does not include again, the transmutation in. That clearly Evidence that money is separate in nature ( i.e just testimony any questions on the home purchased. Because it is not unusual for a couple who get married to purchase the property ''.... Text Search couple who get married to purchase the property to a separate property source to make the payment... Where the money came from a separate property estate payments must be clear our... Property ) 2640 ( `` contributions to the spouse who made the down payment must be traced! For some more general reading on dividing assets in a California divorce, click.! Extended period of time order for a party to be community property is reimbursed as gift! Just “ some documents ” purporting to show a tracing of a loan used to finance the purchase california separate property divorce code 2640! But we will discuss it in a Family Code section 662 often conflicts with the transmutation statutes are. It is california separate property divorce code 2640 getting the legal advice you need at an affordable strategy session you! Party california separate property divorce code 2640 able to trace the down payment can obtain the bank.. Not been met 850 through 853 at or near the time of acquisition ) and!