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Community Property • Reimbursements
CPROP#048
Legal Definition
Where a spouse makes community payments to improve the other spouse's separate property, the majority rule is that there is a presumption the community made a gift to the other spouse's separate property, and thus there is no right to reimbursement. Under the minority rule, though, the community is entitled to reimbursement.
Plain English Explanation
When a married person uses shared money to improve their spouse's personal property, the most common legal view is that this is a gift. So, the shared money spent on these improvements isn't expected to be paid back. However, in some rare cases, the law says the shared money should be returned.
Hypothetical
Hypo 1: Bob and Amy are married. Amy owns a cottage from before their marriage. Bob decides to renovate Amy's cottage using money from their joint account. Result: Under the majority rule, the renovation is seen as a gift. There is no right for reimbursement to the community funds.
Hypo 2: Bob uses community funds to add a fancy new kitchen to Amy's ancestral home. Amy didn't ask for it, but Bob thought it would be a nice surprise. Result: Again, as per the majority rule, Bob's actions are considered a generous gift, and the community (Bob and Amy's joint finances) cannot ask for the money back.
Hypo 3: Amy owns a plot of land from her family. Bob, without consulting Amy, builds a guest house on it using their shared savings. Result: This is treated as Bob gifting the guest house to Amy's separate property. The community funds used have no claim for reimbursement.
Hypo 5: Amy inherited a painting from her grandmother. Bob, using his personal savings account, pays for its restoration. Result: This rule does not apply here because Bob used his separate funds, not community funds, for the restoration. Hence, the situation does not involve community payments towards separate property.
Hypo 2: Bob uses community funds to add a fancy new kitchen to Amy's ancestral home. Amy didn't ask for it, but Bob thought it would be a nice surprise. Result: Again, as per the majority rule, Bob's actions are considered a generous gift, and the community (Bob and Amy's joint finances) cannot ask for the money back.
Hypo 3: Amy owns a plot of land from her family. Bob, without consulting Amy, builds a guest house on it using their shared savings. Result: This is treated as Bob gifting the guest house to Amy's separate property. The community funds used have no claim for reimbursement.
Hypo 5: Amy inherited a painting from her grandmother. Bob, using his personal savings account, pays for its restoration. Result: This rule does not apply here because Bob used his separate funds, not community funds, for the restoration. Hence, the situation does not involve community payments towards separate property.
Related Concepts
How are improvements to own 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?
