Click on a question to see the answer.
Question: How do I handle reimbursement from marital property for the expenditure of marital assets for separate purposes?
Answer: This is the situation where a party has spent marital funds for separate purposes. The classic example involves a spouse who spends money on a party outside the marriage. The other spouse wants to be reimbursed for that expenditure.
If the marital property division is 50/50, the amount to be reimbursed is half of the amount that was spent for separate purposes. (The other half was the spending party's own share of the marital fund.)
If the marital property division is other than 50/50, the amount to be reimbursed is the injured spouse's percent of assets multiplied by the amount spent.
You want to divide the assets such that the injured spouse ends up with the amount to be reimbursed, on top of a 50% division of the remaining assets.
To achieve this, you will compute that amount, and then set your target percent to reflect it.
- Suppose Husband has spent $20,000 of marital funds on non-marital purposes.
- Suppose total marital assets today are $80,000.
- Suppose it is going to be a 50/50 marital property division overall.
1. Add back marital spending on separate purposes. Total before Husband's expenditure was $80,000+$20,000 = $100,000.
2. Wife should get half of that, or $50,000.
3. Since there are $80,000 of assets now, wife should get $50,000/$80,000, or 62.5% of the marital assets.
4. On the Equitalble Distribution (Property Division) screen, set the target percentage to be 62.5%.
5. Divide the assets so that that 62.5 / 37.5 allocation is achieved, and Wife ends up with $50,000.
Note that we only allow whole numbers in the target percentages, but the calculations of results do allow decimal places.