Separate Property v. Community Property in California Divorce
One of the most important aspects of a divorce in the state of California is the characterization of personal and real property. The character of an asset is identified as either community property, separate property, or a mixed asset with both separate and community characteristics.
Community property is defined as all assets and debts accrued or incurred during marriage. In a California divorce or separation, assets and debts are presumptively community property unless one spouse can prove that it is separate property. Separate property is any asset or debt owned prior to marriage, received by gift or inheritance, or which can be traced to a separate property source.
The act of tracing the separate character of an asset or debt is the burden of the spouse seeking to assert the separate property claim. It commonly requires documentary evidence proving the claim and establishing a clean trace. For example, if one spouse receives an inheritance of $10,000 and contributes this sum to the purchase of a home acquired during marriage, and he or she can cleanly trace that asset to the inherited fund (usually through bank statements showing the ingress or egress of funds) then the separate property claim can be asserted. That spouse would then have the right to reimbursement of these funds from the value of the asset. In this example, they would be reimbursed $10,000 from the value of the home prior to further division of property.
If a party wishes to make a separate property claim against a community asset, it is essential that they retain any and all records evidencing the source of separate property funds so that the burden of proof can be appropriately met. It is encouraged that you save all records related to the acquisition of any asset that has a separate property component.
Contact an attorney if you are unsure of what may constitute separate property, what type of records to preserve, or how to assert a separate property claim.