At time of divorce, all property in existence is presumed to be the community property of the spouses. Each spouse has the right to claim that a portion or even all of the property existing at time of divorce is his or her separate property, but must prove that claim by clear and convincing evidence, the most stringent burden of proof in a civil trial.
Separate property is that which you 1) owned before you were married; 2) acquired during marriage by gift, or 3) acquired during marriage by inheritance. What you must do is show the asset existing today is the same asset you owned before marriage, or received by gift or inherited during marriage. That is easy enough to do with real property, where there very likely there will be a deed on file in the county records recording the transaction. It is fairly easy to do with items of personal property. There may be a will from your parent or grandparent identifying the items of personal property being left to you. Or there may be photographs of you standing by your new car all tied up with a big ribbon. It’s money and securities that are the most difficult claims to prove. Showing what you had in an account before marriage and asking to have that amount of money restored to you at time of divorce won’t get the job done. You have to show that the same asset or a mutation of it still exists somewhere in some form at time of divorce. This can be done by tracing, if you have the financial records to support your claim. Cash and securities can be traced through accounts over decades of transition and mutation. Let’s say you started marriage with $1,000 in a bank account. After marriage you bought shares of GE stock with that $1,000 and have the records and statements showing the transaction. Now you own the GE stock as your separate property. The mutations can and often do go on and on over the years, with your original $1,000 changing form many times. If you were to sell the GE stock for $2,000, the entire $2,000 would be your separate property. However, the cash dividends paid by GE are community property. If you left the $1,000 in the bank and received interest on it, the interest would be community property. All income from separate property belongs to the community, but the appreciation in value of the original property retains its separate character. If you have any additional questions and would like to schedule an appointment to talk further with a family law attorney about your property, call us at 972-569-3166.