2011: Estate’s Right Of Reimbursement For Separate Property Contributions To Community Property During Marriage

In San Diego, deceased husbands or wives may have made contributions to community property from their separate property. In San Diego Probate Court, which hears will contests, probate, trust administration, guardianships and conservatorships, it is possible {in a probate case} to request reimbursement from the community property for the estate. This right of reimbursement in probate court is complicated and please feel free to contact us for a confidential and complimentary consultation. In San Diego, there are two probate courts located in Vista and San Diego.

California Probate Code Section 5305 does permit tracing to overcome the presumption of community property for bank accounts in probate proceedings. This is complicated and often a forensic certified public accountant is needed to provide the tracing accounting. This tracing accounting analyzes what right of reimbursement is from the separate property of the deceased and can be very detailed. This is also interwoven with the California Family Law Code which permits similar tracings for family law cases. The below information is notwithstanding the following California Codes: Probate Code Section 5301; Probate Code Section 5302; Probate Code Section 5303; Family Law Code Section 2640 and Family Law Code Section 2640.

If parties to an account are married to each other, whether or not this is documented on the bank account or on the bank records, their contribution {net} to the account is presumed to be their community property and remains community under the Family Law Code.

If the parties are married, then this raises the legal presumption established by this section which affects the burden of proof. The burden is on the party requesting reimbursement which is a rebut table presumption that can be rebutted by proof as follows:

If the sums on deposit on which there is a claim that these sums are separate property, then these sums on deposit need to be traced. This tracing will include the separate property by way of an accounting which will consist of bank statements and other financial documents to prove that the sums were, in fact, separate property. This documentation is mandatory to support that this was not community property and was separate property. If their was a written agreement by two spouses which expressed their clear intent that these sums which are at issue be community property, then this may avoid the need for the tracing as outlined above and would much less costly and time consuming. This must meet the requirements of a written transmutation agreement which is consistent with the California Family Law Code.

A written agreement made by both spouses and signed by both spouses may also be considered. This is separate from the deposit agreement. A deposit agreement may be signed by both parties but may not meet the requirement that the change of character from separate to community of from community to separate per the California Family Lw Code. This written agreement by both spouses must provide expressly that the deposited sums, in which they are claimed not to be community property and, instead to be separate property, were not to be community property.

Given that there are many spouses who re married and had significant separate property assets as of the date of marriage, an analysis of the right of reimbursement can result in a reimbursement to the estate. All cases are different and an individual analysis needs to be made.