Watts Charges

Watts Charges refer to the principle that if one spouse uses a community asset, like the family home, exclusively after separation and before trial, they may have to compensate the other spouse for the fair market value of that use. This is intended to ensure that both spouses share the benefits and burdens of community property fairly during the divorce process.

After separating, Husband continues to live in the family home, which is a community asset, while Wife moves out. The home is valued at $2,000 per month in rent. At trial, the court determines that Husband must compensate Wife for the six months he exclusively used the home, totaling $12,000.

Use it or lose it: exclusive use of community property can cost you!

Exams may present scenarios where one spouse claims exclusive use but fails to mention the fair market value, leading students to overlook the potential for Watts Charges. Students might also confuse this rule with other community property principles, leading to incorrect applications.

Questions often involve fact patterns where one spouse continues to occupy a community asset post-separation, prompting candidates to analyze the implications of exclusive use and potential compensation.