Reimbursing Separate Property Contributions to Community Property Assets
Family Code section 2640 is hand's down probably one of the most important of all the statutes contained in the Family Law Act. It is essentially a reimbursement statute that requires that traceable separate property contributions to the acquisition of community property must be repaid from the value of the asset before any remaining community property equity can be found to exist and hence be subject to division.
I have written about it extensively in various blogs, and you might use the onboard search engine to learn more about its importance and effects.
CALIFORNIA FAMILY CODE
DIVISION OF PROPERTY
REIMBURSEMENTS TO ACQUISITION OF PROPERTY
Family Code Section 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.