2016: What Is The Presumption Of Community Property In A San Diego Divorce Or Legal Separation?

HOW IS COMMUNITY PROPERTY DIVIDED IN SAN DIEGO IN A LEGAL SEPARATION OR DIVORCE?

In San Diego Superior Court, except as otherwise provided by law or code, all property, personal or real, whether in San Diego or not in San Diego, which was acquired by a married person during the marriage while living in California is community property. More generally, all property acquired during marriage by a spouse but before separation is considered community property. "Community Property", by definition, is property which is acquired during the duration of the marriage. “Separate Property”, by definition, is property which was acquired either before the date of marriage or after the date of separation. This can be confusing since not all property which is acquired during the marriage is divided equally and two examples may be gifts and inheritances. “Quasi Community Property” is property which would have been community property but is located outside California and is treated as if it were community property.

HOW CAN THE PRESUMPTION THAT PROPERTY ACQUIRED DURING THE MARRIAGE IS COMMUNITY PROPERTY BE OVERCOME?

As per the above, some property which is obtained during the marriage is not divided one half each. The presumption is that all acquired before date of separation and after date of marriage is considered community property however there is a procedure to contest [rebut] the presumption. What is required to rebut the 760 presumption? Although the presumption is rebuttable, specific and relevant evidence can overcome the presumption. Property defined as separate [ inheritance or gift] can be considered exempted from equal division as above. The general rule is as follows: property acquired during marriage is community unless the preponderance of the evidence establishes otherwise that an enumerated statute specifically exempts to apply a different analysis.

ALL PROPERTY ACQUIRED FROM DATE OF MARRIAGE TO DATE OF SEPARATION IS PRESUMED COMMUNITY

As above, property acquired during marriage is presumptively community property. If the party who acquired this property disputes this presumption of community character, the burden is on that party to establish non community character of that particular asset. One method was to trace the assets or funds that were used to acquire the asset to trace to a separate property source. For example, a bank account with a balance which was opened prior to date of marriage. Tracing [normally] is required when separate and community property funds have been commingled in the same account or accounts and then an asset is purchased with funds from those accounts or account. Commingling of separate property funds in a community bank account {for example} does not change the separate property character of the funds however they must be adequately traced. However, if the community and separate property funs have been commingled to such an extent that the separate property can no longer be clearly identified, then the presumption of community property will prevail.

SOME METHODS TO REBUT THE PRESUMPTION THAT PROPERTY ACQUIRED FROM DATE OF MARRIAGE TO DATE OF SEPARATION IS COMMUNITY EXPLAINED

When moneys used to acquire an asset come from an account which has been commingled, the burden is on the spouse who is claiming the separate property interest to establish that the moneys used to purchase the asset were, in fact, separate funds. There are procedures in this respect. First, a direct tracing [or showing] that all community funds in the account had been exhausted which meant that only separate funds would remain. This rule would not be applicable if the any payment or payments have not been made from a commingled account. With either tracing method, the burden is on the tracing spouse to keep adequate records to prove the tracing claim and [many times depending on the complexity] a forensic CPA will be required. The below methods are (1) not comprehensive and (2) do not include all relevant and necessary information and is for the limited purpose of this article only.

ADEQUATE RECORDS:

A spouse may protect the character of her or his separate property by not transmuting or commingling it. If she or he chooses to commingle, then she or he must assume the burden of keeping adequate records if that spouse is asking for a non equal division.

DIRECT TRACING METHOD:

A direct tracing, which may or may not need a forensic CPA, is mandatory if the withdrawal from an account which was commingled is used to purchase the disputed asset which needs to be traced to specific separate property deposit or deposits into that specific account. The requirements for direct tracing are:

  • Specific records must be provided by the tracing spouse
  • The specific records must establish that on the date that the separate expenditure was made that there were funds which were separate and available in the account to make the purchase, In addition, the spouse who is tracing must have had the intent to use the separate funds to make the purchase itself.
ACTUAL USE OF SEPARATE PROPERTY FUNDS:

You must trace the separate property directly into that particular bank account from which the payment {which is disputed as if not disputed can be stipulated to} was made. You also need to show that on that date {for tracing purposes} there were separate funds sufficient and available in account to make the payment. Again, an expert opinion may be needed.

INTENT TO UTILIZE SEPARATE FUNDS:

In addition to the requirement showing the availability of funds which were separate property in the account from which the payment was made, you {as the spouse who is tracing} must also establish the intent to use those separate funds in purchasing the disputed asset. As part of this proof, oral testimony may be presented from you as to the intention which can then be backed up by documentary evidence of same.

EXHAUSTION METHOD OR FAMILY LIVING EXPENSE METHOD:

Under the ”exhaustion”, "family living expense," or "recapitulation" method, there is a presumption that family living expenses are paid out of community funds. This may need a forensic CPA as the proof is as follows: at the time the disputed payment was made, all of the community funds in the commingled account had been exhausted paying living expenses for the community. As such, the payment which was disputed must have been made with separate funds. As with direct tracing, the tracing spouse has the burden of proof to keep adequate records to establish her or his claim.

SUBSTANTIAL EVIDENCE RULE:

Whether a tracing is adequate, as a matter of law, is a question of fact for the Judge which will hear the evidence in a trial court.

AN EXPERIENCED LOCAL SAN DIEGO FAMILY LAW FIRM CAN ASSIST YOU WITH THE LEGAL ANALYSIS OF CHARACTER OF PROPERTY AS WELL AS OTHER ISSUES

As you can see from this article, the laws and procedures can be very complicated. Please feel free to call the law office of Doppelt & Forney, a Professional Law Corporation to meet with an attorney who can explain not only community property concerns but also many others. Our office can also recommend a forensic CPA as well as any other expert needed for your family law case.

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