Much has been written about community property, a characteristic that causes an equal division between divorcing couples. But, just as important is the identification of property that is owned by one of the spouses which will not be divided in the divorce. Separate property is property acquired before marriage, after the date of separation or during the marriage if acquired by gift or inheritance. Included are the rents, profits and income from the separate property.
What happens when the separate property gets intermixed with the community property? The answer depends on the intent of the parties and the ability to show proof of the intent. For instance, when property has a written ownership document (i.e., deed or “pink slip”) the name on the title will be proof. However, a separate written agreement, or a note on the title, can prove a different intent. Even if title is in one name, the untitled spouse may have a right to reimbursement for community funds spent on the other spouse’s property. The result will depend on the court’s analysis and decision as to what the facts are.
An interesting legal twist is that an award for personal injury damages is community property if the accident occurred during the marriage. But the court may award 100 percent to the injured spouse.
How about the value of an education for one spouse while the other worked? While the license or special earning capability of the trained spouse may not be divisible property, the community may be entitled to reimbursement for the costs of education. The greater earning power of the licensed spouse is also likely to influence support obligations.
In addition, there is a concept called “tracing” that will allow the owner of separate property to “trace” the separate property into community assets and either create a right to reimbursement from the community or an ownership interest in the community.
In essence, the characterization of property is both important and complex. This is especially true when both separate property and community property co-exist and often become comingled. Professional help may be needed to sort things out.
For more information contact the Center for Cooperative Divorce at (661) 255-9348 or visit us online at www.centerforcooperativedivorce.com.