Divorce – Dividing Assets that are part community & part separate
Generally, in divorce, the home and the retirements accounts are the largest assets. They are also typically regarded as part community property and part separate property. This can be cumbersome for determining which is which. In retirement accounts, the money you had in the account at the time of marriage is separate. More importantly, the capital gain of the separate money is also separate. Only the income paid, dividends or interest, are viewed as community property. With respect to the home, if the home is bought during the marriage, but with monies that were separate property, the separate property retains its separate “characterization” provide you can trace it.
Often, a home is owned by one spouse as his or her separate home, and then during the marriage, the couple’s respective paychecks, which are community, pay down the mortgage. While the home remains the separate property of the spouse who owned it prior to marriage, that separate property estate would be subject to a “reimbursement” claim to the community estate, generally, for the principal reduction of the mortgage during the time of the marriage. Reimbursements can be sought by the community for monies spent on the reduction of principal amounts of debts for refinance, capital improvements or simple unsecured liabilities owed by the separate estate of one of the spouses.
I have been successful in obtaining significantly larger monetary awards with proper reimbursement and separate property tracing based on client records.