It is generally understood, among family law attorneys, that Family Code section 2640 is one of the most cited statutes in California Family Law. Family Code section 2640 deals with separate property contributions to the acquisition of community property. However, Family Code section 2641 can be just as important if the community made substantial contributions to the education of one spouse.
Many states handle marital contributions to the education of a spouse in different ways. In some states, a spouse can actually be said to acquire an interest in the other’s spouse’s education and profession. California takes a decidedly different approach. Under California law, the extent to which a spouse can seek reimbursement for contributions made to other spouse’s education are explicitly limited by statute to Family Code section 2641.
Having said this, let’s take a look at the statute. Family Code section 2641 limits such reimbursements to “payments made with community or quasi-community property for education or training or for the repayment of a loan incurred for education or training.” It also provides that the community “shall be reimbursed for community contributions to education or training of a party that substantially enhances the earning capacity of the party.” It is important to note that this statute applies not only to contributions to education or training undertaken during the marriage: it also applies to payment of, for example, student loans incurred before marriage. The statute further provides that the “amount reimbursed shall be with interest at the legal rate, accruing from the end of the calendar year in which the contributions were made.” As of this writing, the legal rate in California is 10% per year.
As alluded to above, these reimbursements are not automatic. The Court has the discretion to reduce or modify the reimbursement “to the extent circumstances render such a disposition unjust.”
The statute presumes that community contributions to education or training made more than 10 years before the commencement of the proceeding substantially benefit the community. This would mean that no reimbursement would be appropriate. However, this presumption can be rebutted. For example, if 15 years ago a husband went to medical school and got a medical degree, but chose to only work at Starbucks, it is probably safe to say the presumption will be overcome.
The Court is also required to consider other circumstances in determining whether or not to award reimbursement to the community. This includes when the “education or training received by the party is offset by the education or training received by the other party for which community contributions have been made” and when the “education or training enables the party receiving the education or training to engage in gainful employment that substantially reduces the need of the party for support that would otherwise be required.” Ultimately, should you encounter an issue regarding Family Code section 2641 reimbursements, you may need experienced legal counsel at your side.
Feel free to contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding community property issues. Nancy J. Bickford is the only Certified Family Law Specialist (CFLS) in San Diego County who is also a licensed Certified Public Accountant (CPA) with a Master of Business Administration (MBA). Don’t settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.