It is Important to Keep All Financial Records After the Date of Separation During Your Divorce Proceeding in California!
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If you are considering a divorce or have already filed for dissolution of your marriage, one of the most important things you can do is to keep good financial records. Not only will this help with the division of marital assets and post-divorce obligations, it will also assist in determining whether one spouse or both are entitled to a "credit", also commonly referred to as an "Epstein credit".
Also, keeping accurate records will assist your attorneys and reduce the amount of time and fees necessary to determine whether you or your spouse is entitled to a credit. The Irvine divorce lawyers of Brown & Charbonneau, LLP can help you present your records to secure your rights in marital property.
As a general rule, a spouse making payments from their post-separation earnings or other separate funds on a pre-existing community obligation will be entitled to a credit for payment made. For example, at the time of separation, the parties have an outstanding debt on a jointly held credit card and one of the spouses pays the balance down or pays it off entirely with his or her post separation (separate property) earnings. If the pre-separation debt was "incurred for the benefit of community", it is likely that the spouse paying the debt post separation will receive a "credit".
In the event that the debt, although incurred during marriage, was solely for the benefit of one party, the court may award the entire debt to the party that obtained the benefit of the purchase and now existing debt.
There is no automatic right to these credits - - you must affirmatively request reimbursement. Typically, credits are discussed and determined at the end of the case, and can impact the outcome of the final division of assets and debts. If you and your spouse agree that neither is entitled to a reimbursement, none will be ordered.
In the case where the paying spouse intended the payment as a gift, or if the payment is made on an asset to be retained by the paying spouse, the court may decline to order reimbursement. The court will also look at the financial circumstances of the parties, and may decline to order reimbursement if it would be unreasonable for the paying spouse to have expected reimbursement.
Before meeting with your attorney, gather as many statements for known debts and assets as possible or contact the company for a copy of the statements. Keep a record of any payment made by you or your spouse after the date of separation on community obligations, or payments made on the other spouse's behalf.
Credits and reimbursements can become complex and complicated. It is best to discuss these issues with your Irvine, CA divorce lawyer and assist them by keeping records of all your known debts that you and your spouse were paying on the date of separation.