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Community Property • Reimbursements
CPROP#047
Legal Definition
Where a spouse makes community payments to improve their own separate property, the community is entitled to the greater of (1) the reimbursement amount or (2) the amount by which the improvement increases the value of the separate asset.
Plain English Explanation
If a married person uses money earned during the marriage to improve property they owned before getting married, the community is entitled to be paid back the amount spent or the amount the improvement increased the property's value, whichever is more.
Hypothetical
Hypo 1: Bob owns an old house before marrying Amy. After marriage, they use community funds to remodel the house, spending $50,000. The remodeling increases the house's value by $75,000. Result: The community (Bob and Amy's joint finances) should receive the higher amount, which is the $75,000 increase in value, not just the $50,000 spent on remodeling.
Hypo 2: Amy and Bob are married. Bob uses $30,000 from their joint account to upgrade his pre-marriage motorcycle. The upgrades only increase the motorcycle's value by $20,000. Result: In this case, the community should be reimbursed the $30,000 spent, since it's more than the $20,000 increase in value.
Hypo 3: Bob inherits a painting from his grandmother. He decides to restore it using $10,000 of community funds. The restoration only increases the painting's value by $5,000. Result: Here, the community should get the full $10,000 back, because the cost of restoration is greater than the increase in the painting's value.
Hypo 5: Bob uses his personal savings, which he had before marrying Amy, to renovate his separate property. No community funds are involved. Result: In this scenario, the rule doesn't apply because Bob used his own, separate funds for the renovation, not community money.
Hypo 2: Amy and Bob are married. Bob uses $30,000 from their joint account to upgrade his pre-marriage motorcycle. The upgrades only increase the motorcycle's value by $20,000. Result: In this case, the community should be reimbursed the $30,000 spent, since it's more than the $20,000 increase in value.
Hypo 3: Bob inherits a painting from his grandmother. He decides to restore it using $10,000 of community funds. The restoration only increases the painting's value by $5,000. Result: Here, the community should get the full $10,000 back, because the cost of restoration is greater than the increase in the painting's value.
Hypo 5: Bob uses his personal savings, which he had before marrying Amy, to renovate his separate property. No community funds are involved. Result: In this scenario, the rule doesn't apply because Bob used his own, separate funds for the renovation, not community money.
Related Concepts
How are improvements to other spouse's separate property using community payments treated?
Upon divorce, how are separate property contributions to the acquisition or improvements of community property treated?
What types of statutes govern where one spouse uses separate property to improve community property?
