Property Division (Community & Separate)

Property Division(Community & Separate): How to Prove your Separate Property in a CA Divorce

Figuring out the Character of Property: Separate and community property can be hard to identify. When you are married, it’s common to share bank accounts, use gifts or inheritance to pay off credit cards or a loan, or use the savings you had before marriage to help pay expenses while married. 

If you do, you might have assets that have both community and separate characteristics. This is called mixed property.  If you litigate your case, the judge cannot divide mixed property and you’ll have to prove what part is separate. If you do, the separate portion or value goes to you and the community portion is divided equally between you and your spouse.

For many, this isn’t a problem since they only have community property. When they married, they didn’t have anything; during marriage, they didn’t receive an inheritance or gift; and since the date of separation, neither spouse owns or owes anything extra. Anything they have will be divided equally between them.

For others, by the time they separate, they have some assets that are separate or mixed. If this is you, you have the responsibility to prove your separate property. It can be very hard to prove when you have a long marriage, poor records, or the property value changed over time, but you can do it with the right information. 

If you want to prove your separate property, you can do this by showing time, providing a tracing, showing separate title of the asset, or showing a transmutation, a writing that converted the property from one character to the other. These are commonly referred to as the “The Four T’s.” Time, tracing, title, and transmutation. The T’s work together to prove that an asset is separate. You would apply these to the property you want to prove is your separate.  If that’s you, you’ll want to keep watching.

TIME. Of the four T’s, time is the most concrete way to show the character of the property. You can show that the asset was received prior to marriage or after the date of separation to prove that it is your separate property.  However, you cannot stop there. If you added your spouse’s name to the title while married, you may have given the property to the community.

TITLE. Title shows who owns the asset. Some assets such as cars, real estate, bank accountants, and life insurance are titled. If it is just in your name, that suggests the property is separate; but if it is titled in both your names, it is considered strong proof that the property is community property. It will be very difficult to prove that it is separate. This rule does not apply to property that can only be titled in one person’s name, like retirement accounts or employer benefits.

Once you have shown time and title, you still need to show how the property still exists today. You can do this with tracing.T

TRACING. Tracing is using evidence like bank statements to show that the original source of the property was separate and where it exists today. You might show the savings account statement from right before you got married. Those funds are your separate property. Then, you provide other statements and documents to show how the funds were saved, purchased another property, or mixed in with community funds. If you spent your separate property on an expense like a credit card or groceries, it’s gone. But if you took your separate savings and purchased a computer, the computer would be your separate property. 

TRANSMUTATION: Even if you use these to show you have separate property, if you agreed to change the character of the property to community, it’s no longer separate. This is called transmutation. You can change property from separate to community, community to separate, or even from your spouse’s separate to your separate property. For the change to occur, it must be in writing, unless made before January 1, 1985, and the spouse, who is giving up their property right, must have agreed to the change. 

Even if you change title or transmute your separate property to community property during marriage, you may still be entitled to a credit for value of your separate property on the day you made the change. These credits can be very complicated and it is best to reach out to a divorce professional, such as a forensic accountant, attorney, or attorney-mediator, to help you determine whether you can receive a credit and the amount of that credit. 

Certain assets, like retirement accounts, are tied to the stock market. If you contribute both separate and community to these accounts, it will be difficult to prove what is your separate property contributions because the amount of the contribution changes with the market. These kinds of mixed property are also complicated, and you might need the same kind of divorce professional to help you determine what portion of the property is your separate property.

If you do prove that the property is your separate, the judge will confirm the property as only belonging to you. If it is a debt, it is 100% yours. If you are unable to prove that the property is separate, then it is awarded to the community and you both own 50%. Even if you can’t completely prove it is your separate property, you might be able to negotiate a deal with your spouse, for a partial separate property credit.

The most important part of the asset and debt division is to reach an agreement that is fair and makes sense for you and your family. Identifying your separate property may be very important to you. If so, take time to pull records, like bank statements, receipts or deeds, to prove your separate property. Even if you don’t have the best records, you can negotiate an amount with your spouse that you believe is fair.

At The Complete Divorce, we provide you what you need to successfully do your California divorce on your own. We provide all the required family law court forms in our automated forms program, all the video tutorials, and an automated customizable Marital Settlement Agreement (Divorce Agreement). If you need more help, you can get our package that includes time with a divorce mediator. 

Before you go, consider if we can help you. We have helped thousands of couples in California. Our guided DIY divorce is successful and cheap! Book a free consultation now. Our services are all 5-star!

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