Friday, July 6, 2012
Boise Family Law Lawyers - (208) 472-2383 Separate and Community Property
Separate and Community Property
As a Boise Divorce Attorney I have spoken frequently in this blog and in others about community property. To be brief, community property is that property which is acquired during a marriage with community funds. This is in contrast to separate property. The distinction between the two is important because upon divorce, community property is divided equally or equitably because it belongs to both parties. At divorce, however, separate property remains the sole property of the original owner, unless….
As a Family Law Lawyer I deal with “unless…” a lot. How and why would separate property become an unless? In the world of family law there is something known as comingling. Comingling exists in divorce law as well as business law. It is the act of mixing property or money so that the original source is unclear. It also often entails a lack of desire to keep property separate which can indicate a sharing nature. Because there is a mixing, the property becomes transmuted. Transmuted is a fancy legal word for changed. As in all these blogs, when I discuss something technical, I am sure it is clear as mud. Let me try to remove the mud and explain.
Speaking in hypotheticals:
Wife has cold hard cash from a previous marriage. She marries new Husband. Wife places her cash in her own bank account. Wife never uses money from her account to pay for anything related to the community. Husband and Wife get a divorce. It is clear that Wife always kept her money separate. She never mixed it with money from the community. It remains her own separate property.
Now let’s take Wife and Husband again but change the circumstances a little bit. Say Wife and Husband are married. Say Wife’s parents die and leave her $50,000. Inheritance, by law, is separate property. Now let’s say that Wife puts that money into her joint savings account. Years pass and Husband and Wife make improvements on their home with money from the savings account. They make regular deposits into the account and make regular withdrawals for other things too, like trips, gifts and taxes. Years pass and Wife decides she is bored and is ready to move on. Can Husband prevent Wife from taking and claiming that $50,000 as her own separate property? You bet he can. He needs to have an experienced Boise Divorce Attorney who understands how funds are traced and how comingling re-characterizes the nature of separate property. This is possible because the funds were treated as community funds. There was never any regard for keeping the funds separate and they were used freely to benefit the community.
So the above two examples are extremes but comingling occurs all the time. A very common example I see as a practicing divorce lawyer is when separate property funds are used to purchase a new home. Does the investment in the new home make the separate property into a community asset? Generally, no, because the separate funds can be traced and any increase or decrease in value can be divided proportionally. The portion that is paid for with community funds will be characterized as community property. The portion paid for with separate funds will be characterized as separate property.
If you are getting a divorce and have community property issues we have divorce attorneys who can handle the complexities involved in dividing the marital community. If you would like to speak with one of our family law attorneys, please give us a call at (208) 472-2383. You will be glad you did.