Using California Community Property While Separated Can Cost You: What You Need to Know About Watts Charges
When you separate from your spouse in preparation for a divorce in California, it’s common for one of the spouses to continue to use community property at the exclusion of the other spouse. For example, when people are separated, often one of them will live in the house bought after the marriage at least until the divorce is finalized. If the couple have one car, usually only one spouse drives it during the separation. However, being the sole user of community property during separation may come with a price, and that price is known as Watts charges. Watts charges are named after a 1985 California divorce case called In re Marriage of Watts. Watts charges are basically one spouse’s obligation to the other spouse for one half of the reasonable value for the exclusive use of a community asset after separation.
How Do Watts Charges Work?
California is a community property state, so when you file for a divorce, the family law court considers income and property acquired during the marriage (with some exceptions such as inheritances) to be the property of both parties. It’s the court’s job to divide that property equally if the couple can’t reach an agreement with the help of their California family law attorneys. Part of that fair distribution may include Watts charges when one of the spouses continues to use community property after a couple has separated but before a divorce is granted. Suppose you and your spouse file for divorce, and your spouse continues to live in a home you both purchased after you were married. Is it fair that your spouse continues to enjoy using the community property of the house for months or even years while you move?
After all, you and your spouse own community property in partnership. Therefore, if a spouse exclusively uses any type of community property while the couple is separated, the other spouse is usually entitled to 50% of the value of such use. The amount of the Watts charges is typically determined by fair market value. If you are seeking payment, though, you will be expected to submit evidence of the value.
Are Watts Charges Awarded Automatically?
Watts charges are not awarded automatically and must be requested by the spouse who is not using the property. Even then, it is not a sure thing that Watts charges will be awarded.
Does the Court Have Discretion in Awarding Watts Charges?
The court has flexibility in ordering payment of Watts charges. It can take several factors into consideration including
- A previous agreement between the spouses that one can use the property without charge
- The court has already taken the value of the property and its use into account when awarding spousal support.
- Income of each spouse
- Earning capacity
- Number of children and custody arrangements
Also, Watts charges and Epstein credits, where a spouse seeks to be reimbursed for payments made on community property, can sometimes offset each other.
Call Ghazi Law Group for a Consultation A court may award Watts charges, but many factors may figure into a court’s decision. This can amount to a substantial amount of money that can affect your lifestyle. Don’t leave it to chance. Contact our experienced family law attorneys at Ghazi Law Group for a consultation (818) 839-6644 or email us at email@example.com to schedule an appointment. We are located in Sherman Oaks, California, close to Encino, Woodland Hills, Studio City, and other areas of Los Angeles County.
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