Epstein Credits and Watts Charges for Spousal Support

by | Dec 28, 2021 | Divorce, Spousal Support

Awarding spousal support is a highly contentious issue that has many legal complexities. One of these complexities involves one spouse paying the other more than the amount owed to them. Family Code section 2626 states that the court has jurisdiction to order reimbursement of debt payments after the parties were separated but before trial. Case law has also added to the statutory authority, as discussed below.

The Epstein Credit

A spouse has the right to be reimbursed by the other spouse for half of the separate property money used to pay for community debt. This only applies if the paying spouse paid after the parties are separated. For example, let’s say Wife and Husband have officially separated and are looking to divorce. They both have moved out of the marital home, which is their community property. But Wife has failed to pay for various home expenses for the past month. To make up for her failure to pay, Husband then uses funds from a gift, his separate property, to pay for Wife’s portion of the expenses. Husband then has a right to be reimbursed under Epstein.

However, there are a few exceptions to getting the Epstein credit, including situations where it is deemed “inappropriate.” These include: 1) if the parties had an agreement, 2) the paying spouse intended payment as a gift, 3) and the payment was made on account of debt for the preservation of an asset the paying spouse was using, and the payment was not in substantial excess of the use of the asset.

Watts Charges

Watts charges are a little different from Epstein credits. When one spouse is in exclusive use of a community asset after separation, they are obligated to pay the other spouse half of the reasonable value of that use. For example, if Husband moved out of the marital home but Wife continued to exclusively use it, Husband would be entitled to half of Wife’s reasonable value of that home.

Why You Should Hire A Lawyer

Spousal support disputes can get complicated and if you aren’t prepared, you could receive a disagreeable result. To ensure you are well represented and prepared, contact the experienced attorneys at Butler Law, PC today.