How Will the Court Treat Commingled Property in My Divorce?
In every divorce case in California, part of the divorce process involves distributing community property. Under California’s community property laws, the court will typically split the community assets in an equal, or 50/50 manner, between the spouses. All separate property will usually be confirmed tothe spouse who owns the separate property. Yet complications can arise, especially when there is existing property that has been “commingled” — property that is mixed, or has characteristics of both community property and separate property. How will the court treat commingled property in your divorce? Our San Jose divorce lawyers can provide you with more information.
Understanding California Property Division Law in Divorce
In order to understand how commingled property is treated in a California divorce, it is important to understand how California family law classifies property.
Generally speaking, any property acquired prior to the date of marriage and after separation will be classified as separate property, while any property acquired after the date of marriage and prior to separation will be classified as community property. There are exceptions. Inheritances or gifts for just one of the spouses acquired during the marriage are classified as separate property. Assets acquired with separate property during the marriage also remain separate property. In enforceable premarital agreements, parties can deviate from California family law and agree that certain assets or debts will remain separate property.
Defining Commingled Property
What is commingled property? As we explained above, commingled property is that in which separate and community property get mixed in an asset or debt. There are various ways this can happen. For example, one of the spouses might use separate assets to pay a mortgage down payment for a home that is community property. Or, for instance, the spouses might agree to use community assets during the marriage to pay off one of the spouse’s separate debts.
Tracing Commingled Property
How will a court handle commingled property? The aim will be to trace out the separate property from the community property (so that only community property will be equally divided between the spouses). There are two general methods for tracing out separate property: direct tracing, or family expense tracing. The latter method is usually used when there are not clear records that allow for a direct tracing out of the separate property.
The burden for this tracing out of separate property from community property will usually be on the spouse who commingled the property and who is claiming a separate property interest in the commingled property, but your lawyer can discuss options with you, as well as the appropriate tracing method for use in your divorce.
Contact Our San Jose Divorce Lawyers for Assistance
If you will soon be going through a divorce and believe you have commingled assets or debts, it will be important to discuss the details with one of our experienced San Jose divorce attorneys at Foster Hsu, LLP. Tracing separate property can be complicated, but your lawyer will be able to assist you with this aspect and all other components of your divorce. Contact our firm today for assistance.
Sources:
law.justia.com/codes/california/code-fam/division-4/part-2/chapter-1/section-760/
law.justia.com/cases/california/court-of-appeal/2023/c095193.html
