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Commingling Community and Separate Property Complicates a Divorce

On Behalf of | Oct 23, 2020 | Divorce

Commingling community and separate property complicates many Carlsbad divorce cases.  Carlsbad, Oceanside, Encinitas and Vista residents who are contemplating divorce may wonder what happens to gifts or inheritances which were given to one partner during the marriage. That depends on whether or not the gift was commingled with marital funds.

In the absence of a prenuptial agreement which specifically establishes the separate property of either or both of the parties, the assets and debts of the parties must be characterized and ultimately divided.   Any asset or debt which was acquired during the course of the marriage is generally known as community property.  Community property in a California divorce is divided equally between the parties.

There are a few exclusions to the community property statutes such as personal injury awards or settlements as well as properly structured and separately maintained financial gifts and inheritances.

Property and assets which were owned prior to the marriage and kept separate during the marriage are usually considered “separate property.”    The caveat here is that such assets cannot be put in a joint marital account, or they may be considered marital property and subject to division.

When “separate” funds or assets are used for the benefit of the married couple, or marital funds are used to support or maintain an otherwise separate asset it is known as “commingling.”  Commingling community property and separate property complicates a divorce.  Resolving the value of community property and separate property often requires detailed financial analysis by an external expert as well as extensive negotiations and/or mediation.  If the parties cannot reach agreement on what is community property and what is a separate asset as well as the value of each the Judge in your case must decide the matter.

Commingling community and separate property is actually quite common in a Carlsbad divorce case.  For example, a loan made to one partner during the marriage may have significantly different meaning at divorce.  If the loan was used jointly as marital funds, then it may be seen as a marital liability and subject to joint repayment.  However, if the funds were construed to be a gift and placed in a separate account, a former spouse may have no obligation or right to claim or repay half of it during community property division.

The Certified Family Law Specialists at Burke & Domercq assist during divorce negotiations to help to differentiate community property from the separate property of either former spouse.  This can help a couple to reach a fair and reasonable settlement in a more cost effective manner.

Protect your own interests and contact us or call 760-389-3927 to schedule an appointment for a remote or socially distanced consultation with one of our experienced Certified Family Law Specialists.