Separate Property vs Community Property in a Divorce?

check booksPrior to marriage, each party’s property is known as “separate property.” This means that you–and only you–own this property, and it should remain yours following a divorce. Any property that you and your spouse accrue during marriage is known as “community property” in California. However, in many instances, the line between separate and community property is easily blurred through “commingling.”

Commingling, in short, mixes separate property with community property so that the two are no longer clearly distinguished, and your spouse may hold an interest in property that was previously considered separate. Commingling can happen in a variety of ways, and may limit your rights to your property in divorce, as a court will likely divide commingled property between you and your spouse.

Ways in Which Commingling Occurs

The following are only some examples of ways that separate property becomes commingled during a marriage:

  • You had a money saved in a separate account prior to marriage and then pooled that money with your spouse’s savings in order to purchase a house or other property;
  • You owned a home on your own before marriage, but began paying the mortgage out of a joint marital account after marriage;
  • You and your spouse both deposit money into a bank account that is only in your name;
  • Your spouse starts contributing to an investment account you held prior to marriage;
  • You receive an inheritance, and deposit those funds into a joint account, or otherwise use the money for marital purposes;
  • You borrow money from one of your family members and then use the funds for the benefit of the marriage or your spouse. (Note, these funds become marital property in this type of situation, and your spouse will be considered responsible for paying back such a loan.)

While it is understandable that each spouse would want to contribute to help support the marriage, such commingling often creates disputes once divorce is imminent, as each spouse may wish to recover or retain their previously separate property.

Can You Avoid Commingling Funds?

There are steps you can take in order to avoid commingling and to preserve your separate property. Examples of such steps include:

  • Sign a premarital agreement that clearly identifies separate property to which each spouse is entitled in the event of a divorce;
  • Maintain a bank account in your own name, and avoid depositing any of your spouse’s income into your separate account or using funds from your separate account for marital purposes–instead, use a joint account for all marital debts and purchases;
  • Keep all inheritances, gifts, or loans from your family members in a separate account, and do not withdraw money directly from that account for marital purposes;
  • If you have a mortgage in your name that you would like to remain separate property, always keep only your name on the deed, and only use funds from your separate accounts to pay that mortgage or maintain that property.

Avoiding commingling is difficult, and will require clear communication between you and your spouse. You must also maintain thorough record-keeping if you wish to maintain separate property. An experienced divorce attorney at Beck Law P.C. in Santa Rosa can help advise you on how to avoid commingling so that you are entitled to your own property if you face divorce.