What happens to comingled property in a divorce?
As you begin the divorce process, you will find yourself spending quite a bit of time reviewing your property to determine whether it is considered “community” property under California law. As a community property state, California considers most property acquired by either spouse during the marriage to be community property. This property is owned jointly by both spouses, and subject to division during the divorce.
California law considers property owned prior to the marriage, however, as separate property. Separate property also includes property received as a gift or inheritance. If you comingled that property with the marital property, however, you may have trouble convincing the court to treat it as separate property during the divorce.
Identifying separate property
You may find it simple enough to identify whether you purchased certain items before or during the marriage. For example, you may have purchased a house two years before you got married. The difficult part is deciding whether that house has been comingled with marital property. For example, if your spouse began helping with the mortgage payments and you put your spouse’s name on the title after you were married, the court may view some of the value of the house as marital, or community, property.
If, however, you managed to keep the property completely separate from your spouse and your spouse did not contribute to the upkeep of the property at all, you may have an argument for keeping it separate. Often, a skilled forensic accountant can help pin down the money trail of certain items to help make your case.
If you have a prenuptial agreement
Many people use prenuptial agreements to avoid confusion about securing separate property in the case of divorce. In fact, this is the primary purpose of a prenuptial agreement. If you signed a prenup, you should review that document with your attorney to determine how it will affect the property division in your divorce.
In addition, you and your ex may create your own property settlement agreement that may not follow the community property rules. As long as you both agree, the court will likely approve your settlement.