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Commingled Assets and Debts in a San Diego Divorce

On Behalf of | Aug 30, 2021 | Community Property Division

How will the Court handle commingled assets and debts in a San Diego divorce.  Generally speaking, there are principally two types of community property in a San Diego divorce – “community property” and “separate property.”

Basically, community property will encompass any assets and debts which are obtained by the parties jointly or separately from the date of the marriage to the date of separation.  There are a few exceptions such as Social Security, personal injury settlements and properly structured and maintained inheritances.  Separate property is generally any asset or debt which either of the parties held prior to the date of the marriage or entered into after the date of separation.

In order for an asset to remain the “separate” property of either party, one must never use marital assets or work to enhance or support the separate asset.  If it is a financial account, there should never be money moving from marital accounts to the separate asset.  If it is some form of property, marital monies and/or labor should not be used to maintain or improve a separate asset.  When the lines are blurred between a separate asset and a marital asset it can lead to commingled assets and debts in a San Diego divorce.

One common example is spouse “A” owns a house prior to the marriage.  This property is sold and the proceeds are used to purchase the marital home.  In most cases, the “profit” from the sale of a separate asset should ultimately be determined to be separate property.  However, separating the “separate property” from the “community property” in these cases can be quite challenging.

Another example might involve a business or professional practice.  If a company was a “separate” asset of one of the spouses, but marital funds were used to support the business the asset could be considered to be commingled.

Disputes are very common when it comes to community property division in a San Diego divorce.  The Court must determine the nature of any asset or debt (community or separate) prior to the ultimate division of the marital assets of the couple.  If an asset has become commingled the process to determine the ultimate present value of the asset as well as the allocation of that value between the parties based upon what is “separate” and what is “commingled” can be legally and financially quite complex.

This is why it is important to work with the Certified Family Law Specialists at Burke & Domercq.

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.