Epstein Credits and How They Can Affect Your Divorce

Posted by: Gerald A. Maggio, Esq.

Orange County divorce mediation; California Divorce MediatorsEpstein credits come up often in California divorce proceedings and as such it pays to know a bit about it. Spouses often learn about these from their lawyers and it is often a contested issue.

Epstein Credit

The term Epstein credit originated from the Marriage of Epstein case. This 1979 case is a published California case. The Epstein credits initially partially became a part of the California Family Code, section 2626. The code states, “The court has jurisdiction to order reimbursement in cases it deems appropriate for debts paid after separation but before trial.”

So, the Epstein credit is basically a form of reimbursement. It offers reimbursement to the spouse who pays community expenses or debts after separation but before the trial. This applies when the spouse pays such expenses with their post separation money. The reimbursement that they receive is actually the other spouse’s share of that particular debt or expense. As example of the type of expense we are discussing here we can consider payments toward a property mortgage. These credits are not limited only to certain types of payments or assets.

Exception to Epstein Credits

There are several exceptions that need to be kept in mind while considering the Epstein Credits rights. There are certain situations in which the family court may not order the reimbursement: They are as follows:

  • The spouses have a prior agreement that does not allow a reimbursement.
  • The payment was to take care of the paying spouse’s spousal support or child support obligations.
  • The spouse who is seeking the reimbursement will not receive it as the payment was initially intended as a gift.
  • The spouse cannot seek reimbursement for the mortgage payment of an asset that they have been using exclusively.

Each individual case differs from the other when it comes to the use of these credits. Irrespective of that, it cannot be ignored that these credits can come in very handy and be useful in any California divorce proceedings. It can take care of some of the most complicated cases of division of assets and treatment of payments made towards mortgage and debts; an issue that most separated couples face.

It is important to consult a divorce advocate who can provide you counsel on whether or not these credits are applicable in your case and if so, then how you can go about using it in your case.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation