Reference no: EM133681783

Question

Explain in California: Sub-issue: Improvement to Goldenacre. Rule: When CP funds are used to improve one spouse's SP real property, the community may be entitled to reimbursement. Application: Harriet used $10,000 of CP earnings ($1,000 for 10 months) to build a cabin on Goldenacre. Absent a writing signed by Walter, Harriet can't make a gift to herself of Walter's one-half of the CP used to improve her SP. The improvement added $25,000 to the value of Goldenacre. The CP is entitled to reimbursement for either the amount of the CP funds used toward the improvement (i.e., the cabin) or the increased value of the property due to the improvement, but not both. Conclusion: Although $10,000 of CP was used, the CP would likely be reimbursed the larger sum of $25,000. Each spouse would receive $12,500 of that CP reimbursement. Walter cannot claim an ownership interest in Goldenacre just because he was married to Harriet when the property increased in value. Harriet will be the sole and separate owner of Goldenacre and the cabin that sits on it but she will owe Walter one-half the increased value due to the CP improvement.