The Basics of Epstein Credits and Watts Charges in a Divorce

If you are thinking about getting a divorce in California you may be discussing the logistics of the separation. If you and your spouse own a home you may decide that one of you will continue to live in the home while the other relocates. If your home is community property belonging to both you and your spouse, you may be faced with Epstein and Watts issues when you are settling your divorce.

Here, we provide a brief overview of Epstein Credits and Watts Charges to help you understand your rights and obligations during a divorce.

What are Watts Charges?

If you and your spouse separate and you exclusively remain in the family home after that separation, you may be asked to pay Watts Charges. Watts Charges are requested when one spouse exclusively uses community property after a separation.

Put simply: paying a Watts Charge is like paying rent. You are exclusively using community property (in this case, a family home) for your own personal use and enjoyment. Your spouse, who is generally entitled to 50% of the value of community property, is enjoying 0% of that property’s value and use. Watts charges compensate your spouse for your use of exclusive community property.

What are Epstein Credits?

If you and your spouse separate you exclusively pay the mortgage and/or rent for community property with separate funds, you may request to be reimbursed for your spouse’s share of that burden. These reimbursement requests are known as Epstein Credits.

If, for example, you pay the entirety of the mortgage each month, you may request that your spouse reimburses you for 50% of that payment each month. However, payments must be made from your distinct and separate financial accounts. Epstein Credits will not be applicable if payments are made from jointly-owned or jointly-used banking accounts.

Are Epstein Credits and Watts Charges Automatic?

No, Epstein Credits and Watts Charges are not automatic during a divorce. A spouse who is not exclusively enjoying specific community property must request Watts Charges and a spouse who is exclusively paying for community property from separate and independent funds must request Epstein Credits.

Even when requested, these charges and credits are discretionary and are not automatically awarded. A judge, when reviewing the request for Epstein Credits and/or Watts Charges, will consider several factors when determining the award is appropriate. Factors that may be important in a judge’s evaluation of a request for Epstein & Watts may include:

  • Each spouse’s individual income
  • Each spouse’s earning capacity; and
  • The number of children residing in the home.

Courts may also refuse to award Epstein Credits if:

  • Spouses have a preexisting agreement concerning payment and reimbursement;
  • Payments for the mortgage or community property were intended as a gift to the other spouse;
  • The spouse who made the community property payments continued to live in the home; or
  • The payments for community property were made to satisfy child or spousal support.

A judge will weigh and consider all factors that may be relevant to determining if an award of Epstein Credits and/or Watts Charges is appropriate. Contact an experienced California family law attorney to learn more.

How are Epstein Credits and Watts Charges Calculated?

The burden of proving why Epstein Credits and Watts Charges should be granted is placed on the party asking for the award. Epstein Credits are generally calculated by identifying the actual amount(s) paid for the community property by the requesting spouse.

If you are interested in asking for an award of Epstein Credits you must carefully and purposefully track the payments you make. It is crucial to document that payments for the subject community property are made from separate and exclusive financial accounts. Bank records, mortgage statements, and records of payment can provide the evidence that is necessary to establish cause for an award of Epstein Credits.

Watts Charges are generally calculated by determining the fair market rental value or use of a community asset. If the community asset is a home, the fair market rental value would be the most accurate and appropriate figure. While spouses may be able to speak to the rental value of your home, it may be appropriate to obtain the unbiased opinion of a real estate appraiser and/or expert. An expert can accurately assess the value of a home and determine the fair market rent.

Epstein Credits and Watts Charges may also be offset by one another. If, for example, you pay the entirety of your home’s mortgage payment, but also live in the home exclusively, you may not be awarded Epstein & Watts. This determination, however, will depend on the fair market rental value of your home and the amount paid each month toward your mortgage. A judge will consider these factors when determining if Epstein and Watts are appropriate.

Experienced California Family Law Attorneys

Epstein Credits and Watts Charges can be complicated and it is best to contact an experienced California family law attorney if you are thinking about separating from your spouse. If you’re looking for a divorce lawyer, make sure to check out our guide on finding a good divorce lawyer in California.

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How To Find a Good Divorce Lawyer in California

If you are going through a divorce in California, you’re probably wondering how to find a good divorce lawyer. We put together this comprehensive list to help you from the moment you begin your search through the time you actually retain an attorney.

1. Educate Yourself Before Meeting with Attorneys

Before even meeting with an attorney, you should take the time to educate yourself on the divorce process. Fortunately, there are great online resources to help you. We asked Los Angeles divorce lawyer Hossein Berenji for the top three sites he recommends. He suggested:

A. California Courts – Divorce and Separation Self-Help

This website, provided by the State of California, provides an excellent overview and resources for those seeking a divorce.

B. California Courts – Filing for Divorce

This website, also provided by the State of California, gives you step-by-step info regarding the divorce process. Even though you may be hiring a family law attorney, it helps to know the process.

C. State Bar of California – What Should I Know About Divorce and Custody

This information is provided by the State Bar of California, the administrative arm of the California Supreme Court overseeing attorney conduct. This FAQ covers important information that will help you get started on your divorce.

2. Be Proactive

If you suspect that your spouse is seeking a divorce, meet with an attorney immediately. Don’t wait until you’re served with divorce papers to start the process. After your spouse serves you with divorce papers, you will only have a small window of time in which to reply. You don’t want to have to hire an attorney under a tight deadline.

3. Look For An Attorney Online

If you’re searching for an attorney online, start by searching using the name of your city plus “divorce lawyer.” For example, if you live in Burbank, CA, you would type “Burbank divorce lawyer.”

Beyond the organic results you see, you may want to check out these additional sites:

YELP: Yelp is a great place to read about attorneys. While you should always take online reviews with a grain of salt, it’s a starting point when researching attorneys. Make sure you don’t simply look at how many stars they have, but take the time to read the actual reviews – both good and bad. See more: https://www.yelp.com

AVVO:  Avvo is another great place to research attorneys. Beyond the reviews and peer endorsements, Avvo tells you if the attorney has ever been disciplined by the State Bar for violating the California State Bar Rules of Professional Conduct. See more here: https://www.avvo.com

CALIFORNIA STATE BAR:  The State Bar website provides information on attorneys and also offers a referral service. If the attorney has been disciplined, you can find out more by visiting their profile. You can also search for an attorney by visiting here. See more: http://www.calbar.ca.gov

4. Ask Friends For Recommendations

Word of mouth can actually point you to the right family law lawyer. Ask friends and family to recommend a good lawyer that handles divorce cases. You can try asking someone you know that has gone through a divorce. They may be able to suggest someone that you can hire to handle your own divorce case. You can increase your chances of finding the attorney by simply searching for one based on word of mouth.

5. What to Look For When Researching Attorneys

Some of the factors you’ll want to consider are:

  • Years of experience: How long have they have been practicing law?
  • Where they attended law school: While not as important as experience, it’s a good idea to find out where they attended law school.
  • Whether they exclusively handle family law: This is important, especially in a large city where attorneys tend to specialize in one area of law.

A lawyer that is experienced in family law should be your first choice. You should not look into a lawyer that handles real estate, or even a criminal defense attorney. Always go for a family law lawyer. By doing so, you will get their knowledge and expertise when it comes to divorce law.

6. Hire a Specialist

Depending on the complexity of your case, you may want to hire a Certified Family Law Specialist. A CFLS is certified by the California State Bar as a specialist in that particular area of law. Typically, you can expect a CFLS to charge a higher hourly rate than a non-CFLS.

Again, it may not be necessary unless your divorce involves more complex property division or custody matters.

7. Meet with at Least 2 – 3 Attorneys

Shop around for a competent divorce lawyer. You should not settle on the first one that you find. It can be a good idea to set up meetings with at least two or three other lawyers, especially if you want to find a competent one. You can canvas different kinds of lawyers, to get a sense of their different skill sets. By interviewing many divorce lawyers, you may be able to select the best one out of the bunch.

Many family attorneys now offer a free consultation. Use this time to essentially interview different attorneys. Discuss your case and get feedback. You shouldn’t always go with the attorney that tells you what you want to hear, but rather what you need to hear.

8. Questions to Ask a Divorce Attorney Before Hiring

Here are a few questions you should consider asking during the initial consultation.

A. How much do you charge per hour?

B. Do you have a “blended” rate (If yes, what is it?).

C. How much do you estimate my case will cost?

D. Are you familiar with opposing counsel?

E. Have they handled cases in front of the judge assigned to me? (If a judge has been assigned).

F. Will you be the only person working on my case? (If not, see below).

G. Who will be working on my case? (Get their experience)

H. Can I meet any associates that will be working on my case besides you?

I. During what hours can I call you?

J. What if I need to contact you in the event of an emergency?

K. Will I receive monthly bills?

L. How much is your initial retainer?

M. How do you bill per hour? In 6 minute increments?

9. Be 100% Honest

Attorneys throughout the United States are bound by what is known as attorney-client privilege. Even if you don’t retain them, they are bound by attorney-client privilege regarding whatever was said during the meeting. In California, attorney-client privilege provides almost absolute protection against an attorney disclosing what was said during the consultation.

People have a tendency to paint a one-sided picture during the initial consultation. While attorneys know this, it’s best to be 100% honest from the start. Remember, attorney-client privilege protects you regardless if you retain the attorney.

10. Personality Fit

A. Do you get along?

This is a simple one. Did you enjoy your meeting with them? Did you feel comfortable telling them about your situation. You don’t have to be best friends with your attorney, but it’s preferable to hire an attorney that you get along well with.

B. Did they pressure you to retain them?

If yes, you may want to hire someone else. While an attorney has to make a living, they are in a position of authority and shouldn’t be pressuring you to retain them.

11. Location

As they say, law is local. You therefore want an attorney who is local to court where your case is being heard. A local attorney will know the judges, attorneys, and experts.

Don’t hire an attorney because their office is conveniently located by where you live and/or work. Hire an attorney that is local to the court where you case is being heard.

12.  Law Office Appearance and Professionalism

This one is simple. If their office is dirty and their staff unfriendly, don’t expect that to change after you hire them. If they can’t be professional before you give them your money, they are unlikely to be professional after taking your money.

13. Understand the Scope of the Divorce

Before going down the path of divorce, you should try to understand the scope of your divorce. What are the issues at stake?

  • Custody
  • Support (child and/or spousal), and
  • Property Division

Knowing the contested issues will give you a better idea of what to expect in terms of time, money, and stress.

In Closing

By following these guidelines, you should be able to hire a very reliable and competent divorce lawyer. If you want to go through the least amount of trouble when you are undergoing a divorce, you should look into hiring one. A divorce lawyer’s services could be invaluable whenever you are going through a divorce. And you may be able actually to go through a pain-free divorce if you hire the right kind of lawyer to handle your case.

Do not hesitate to contact the services of a divorce lawyer if you find one that you can trust, you will be making a very good decision if you hire them.

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Tips for Talking To Your Children about Divorce

Divorce is one of the most difficult challenges anyone could ever face. Anytime a long-term relationship comes to an end, it can be a heartbreaking experience for everyone involved. Couples throughout Utah spend years building a life together, whether it is buying a house, having kids and balancing a career. Nobody is truly prepared to deal with this situation. But perhaps the biggest victims of divorce are the children. They are often caught in the middle and must make the huge adjustment to living with two separate families. Before you contact a divorce attorney, it is important to discuss these issues with your kids.

A Team Effort

Regardless of how difficult the situation, it is the responsibility of both parents to act in the best interest of the child. Having a conversation about divorce is never easy. When it comes to divorce, timing is everything. First, it is best to talk with your kids at least two or three weeks before the separation. Both parents should work together to formulate a proper plan on how to discuss this delicate topic.

Maintain a Caring Tone

When there is acrimony in a marriage, it can be easy for both parents to lose their temper. But when it comes time to talk with your kids, it is important to maintain a caring and sympathetic tone. Remember, they are also going through a difficult time. Choose a quiet place, where there are no distractions. Try to have the conversation during a weekend. During the week, kids are often stressed about their school work.

Communicate With Your Child’s Teacher

Teachers play a major role in a child’s development. During the course of a week, children often spend more time with their teachers than with their parents. In far too many cases, children of divorcing parents often decline in their academic performance. Before parents discuss divorce with their children, try to inform the teacher in advance. Tell the teacher to be sensitive and discreet about the family situation. Teachers can often spot when a child is going through difficult times. By being more understanding, they can help the child with any academic problems during a divorce.

Avoid the Blame Game

One of the worst things a parent can do is to blame their spouse for the divorce. It only makes the situation worse. Children should respect both of their parents. Blaming a spouse not only makes them look bad, it also makes you bad. Unfortunately, many children of divorce blame themselves for their parents splitting up. Try to convey to your children that divorce is strictly an adult decision between both parents.

A Salt Lake City Divorce Attorney Can Help

There are no easy solutions for divorce. Among the most difficult is helping your child through this turbulent period of their life. Salt Lake City divorce attorney Christopher M. Ault understands the challenges and obstacles many parents face. As a divorced father, he understands the unique perspective of his clients. He utilizes a compassionate and comprehensive approach to help place each client in the best position to succeed. Over the years, he and his legal team have provided representation for a variety of family law issues. To learn more, contact The Ault Firm and schedule a consultation to discuss your case.

Author Bio:

I am Christopher M. Ault, Attorney at Law. I am a Salt Lake City divorce attorney with a breadth of knowledge and skill in family law and divorce law. I am committed to helping protect and look after the best interests of each of my clients in every facet of family law.

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