What is a Family Code Section 2640 Claim?

California Family Code section 2640 provides for reimbursement of one spouse’s separate property “contributions to the acquisition of property.”  The exact language of Family Code section 2640 is listed below.  A simple example would be one spouse’s down payment of funds from a separate property source such as inheritance for the purchase of a community residence. Wife inherits $20,000 from her mother’s death. Husband and Wife decide to purchase a residence while married.  Wife is the only contributor of the downpayment for the home, paying $10,000 from her separate property inheritance. Husband and Wife decide to dissolve their marriage and sell the home. Wife makes a claim for reimbursement per Family Code Section 2640. Assuming Wife can prove the $10,000 came from her separate property, at the time of sale Wife will receive the first $10,000 of net sales proceeds and the remaining net sales proceeds will be divided equally between the Parties.  Wife is not entitled to any interest on her downpayment. If the Parties’ home has negative equity, and is sold for less than what is owed, there is no reimbursement to Wife — her funds are lost.  If you think you may have such a claim or need assistance asserting such a claim, contact our office today to set up your free consultation (916) 782-2737 or email help@carlisleandgraylaw.com

CA Family Code Section 2640

2640. (a) “Contributions to the acquisition of property,” as used
in this section, include downpayments, payments for improvements, and
payments that reduce the principal of a loan used to finance the
purchase or improvement of the property but do not include payments
of interest on the loan or payments made for maintenance, insurance,
or taxation of the property.
(b) In the division of the community estate under this division,
unless a party has made a written waiver of the right to
reimbursement or has signed a writing that has the effect of a
waiver, the party shall be reimbursed for the party’s contributions
to the acquisition of property of the community property estate to
the extent the party traces the contributions to a separate property
source. The amount reimbursed shall be without interest or adjustment
for change in monetary values and may not exceed the net value of
the property at the time of the division.
(c) A party shall be reimbursed for the party’s separate property
contributions to the acquisition of property of the other spouse’s
separate property estate during the marriage, unless there has been a
transmutation in writing pursuant to Chapter 5 (commencing with
Section 850) of Part 2 of Division 4, or a written waiver of the
right to reimbursement. The amount reimbursed shall be without
interest or adjustment for change in monetary values and may not
exceed the net value of the property at the time of the division.

What is a Status Only Divorce?

One of the primary questions parties going through a divorce in California ask is “how do I actually get divorced?”  Well the answer is one of two ways (1) through an agreement usually referred to as a Marital Settlement Agreement; or (2) trial.

The next question usually is “how long is this going to take?”  The length of time to get divorced is really dependent on the Parties.  Pursuant to California law, Parties cannot be divorced for six months from the day the other Party was served with the Petition for Dissolution.  Many parties believe six months is a lengthy period of time, however, many divorces on average can take one year to finalize.

In settling a dissolution, two parties must come together and make agreements which is not always easy immediately following a separation when emotions run high.  There are multitude of other reasons a divorce proceeding can carry on for a significant period of time, including but not limited to, complex financial matters, health issues, etc.  So what happens if you want to remarry, or you just really want the status of a single person and your divorce is not final? One option is a status only divorce pursuant to Family Code section 2337 which states in part : “In a proceeding for dissolution of marriage, the court, upon noticed motion, may sever and grant an early and separate trial on the issue of the dissolution of the status of the marriage apart from other issues.”

A status only divorce, also known as a bifurcated divorce, is a process whereby the legal status as a married person is separate from all other issues within the divorce such as custody, asset division, etc.  The court will generally authorize a party’s request for dissolution, so long as all financial disclosure has been completed, and the other party is not significantly prejudiced by the bifurcated divorce proceedings.  Family Code section  2337 , may also require the party requesting the bifurcated divorce to adhere to certain provisions which may include maintaining the other party on health insurance until all matters are resolved, a probate homestead in case you pass away before all matters are resolved, etc.

The process for obtaining a status only divorce is rather easy and may be the best possible solution to a divorce that is taking an extended period of time to finalize. Consult with an attorney before deciding to bifurcate your dissolution action, to ensure this is an option beneficial to your situation.

Financial Disclosure Required for Divorce in California

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To obtain a Judgment of divorce in California, financial disclosure must be completed. Roseville divorce attorney Christy M. Carlisle, explains for you more fully herein how to complete the disclosure process.

1. Documents that Comprise Disclosure

The documents that comprise disclosure in California, including Roseville and Sacramento areas, are as follows: (1) Schedule of Assets and Debts (FL 142); (2) Income and Expense Declaration (FL 150); (3) Declaration of Disclosure (FL 140); and (4) Declaration Regarding Service of Disclosure (FL 141). These documents can be obtained at your local courthouse or online at the California Judicial Council website.

2. Completing the Schedule of Assets and Debts

It is necessary to list out all assets and debts on the Schedule of Assets and Debts. It does not matter whether the assets/debts are assets/debts in your name or that you believe belong to you or to your spouse, all assets/debts that are known to you need to be listed. If an asset or debt was acquired by either party before marriage or after separation, that asset or debt may be separate property and should be noted as such in the column marked “sep” by placing an “H” for husband or “W” for wife. The listing of assets and debts is just that a listing, you are not providing information on how you want the assets and debts divided. It will also be necessary for you to gather and attach a copy of all deeds, car titles and/or registrations, and statements (bank, retirement accounts, credit cards, etc.) that correlate with the assets and debts that you have listed. This document does not get filed with the Court.

3. Completing the Income and Expense Declaration

Complete all sections on the Income and Expense Declaration and attach your last two pay stubs and previous year W-2 and/or 1099s. If you are self employed it will be necessary to attach your profit and loss statement and/or corporate returns. It is not always necessary to file this document with the Court depending on the local rules of your county, but to cover all bases you may want to file the Income and Expense Declaration with the Court and attach it as part of your disclosure as well. If you file the Income and Expense declaration with the Court, you will need a proof of service as well.

4. Completing the Declaration of Disclosure

Check all boxes on the front page. This document is your statement under penalty of perjury of the laws of the State of California that you have disclosed to the other party, all assets and debts known to exist at the time that you complete the disclosure documents. It further declares that you do not know of any financial opportunity being presented to the marital community estate. Date and sign.

5. Declaration Regarding Service of Disclosure

Mark the boxes for service of preliminary disclosure and indicate the manner in which you are serving the documents (ie. mail or personal service). Indicate the date that you served the disclosure and whom you served the disclosure on (ie. party or party’s attorney). Date and sign. It will be necessary to file this document with the Court. The filing of this document is critical because without this document being filed by each party, a judgment for dissolution will not be entered.

6. Waiver of Final Disclosure FL 144

Final disclosure is generally more comprehensive disclosure which indicates more in depth values and documentation. However, if both parties agree that preliminary disclosure was completed thoroughly and accurately, the Parties can agree “stipulate” to waive final disclosure by completing the Stipulation and Waiver of Final Disclosure form.

7. Importance of Full Disclosure

California law requires a complete and full disclosure of all assets and debts known to exist by each party. Failure to provide accurate and complete disclosure can lead to serious penalties such as court sanctions (fines), awards of attorney’s fees to the other party, and/or an award of a particular asset to the other party that you may have wanted to keep.

How to File Divorce in Roseville, California

The threshold question you must answer before filing for divorce in California’s cities of Roseville, Sacramento, etc., or counties throughout such as Placer, Yolo, Sacramento, El Dorado, is have you lived in California for 6 months and have you lived in the county where you are filing for three months. If the answer is “yes” then you will want to obtain the following forms:

1. Petition for Dissolution – FL 100

2. Summons (Family Law) — FL 110

3. If there are children involved you will also need to file a Declaration Under UCCJEA — FL 105.

It will also be necessary for you to check your court’s local rules to ensure that there are no “local forms” required. Some counties have “local forms” which are forms only used by that county which are generally used for some administrative process the court has.

Once you have completed all the requisite forms, it will be necessary to sign and date the forms. Once the forms are signed and dated you will want to copy them three times. Take the original and copies of all documents to your local courthouse for filing. There is a filing fee for filing for dissolution in California, therefore, you will want to either bring your checkbook or check with the court ahead of time to determine the exact fee that will be charged. Presently the fee is $435.00. This can be expensive for many people, therefore, depending on your income level you may want to fill out a request for a fee waiver and file that along with your dissolution paperwork. The fee waiver request must also be accompanied by an order on the request for fee waiver and you should have the original plus two copies in order to file the request.

Once you have accomplished the goal of filling for a dissolution, your spouse must be served personally. You cannot serve your spouse, a person over the age of 18 not a party to the action can serve your spouse. Once your spouse is served you will need to prepare a Proof of Service of Summons which needs to be completed and signed by the party who served the documents. The completed Proof of Service of Summons needs to be filed with the Court also — remember anything you take to court to file should be the original plus at least two copies.

This guide is for informational purposes only and is not a substitute for seeking legal counsel. Dissolution in California is complex and seeking legal advice from divorce attorneys in Roseville, Sacramento, California, is recommended. This guide does not create an attorney client relationship. Call today 916/782-2737, or email help@carlisleandgraylaw.com to set up your consultation.