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Complex Property Division

The division of assets should not be a rote exercise of dividing everything “down the middle.” There are personal, professional, strategic, and tax reasons, which call for a thoughtful, creative division of a family’s assets. Special consideration should be given to the division of income-producing assets and the potential effects on support that it may have in a case before deciding on the method of division.

If a spouse believes that he is entitled to more than half of the estate, an understanding of the various “separate property tracing” and “reimbursement” principles is critical to the spouse making that claim in order to meet his burden of proof. The burden of proof rests with the spouse who is claiming that an asset is all, or part, separate property. As an example, consider if one spouse owned stock prior to the marriage and during a 20-year marriage, he closed the original stock account, opened a new stock account, sold the original pre-marital stock, purchased new stock with the sales proceeds from the premarital stock, used a margin account for trades, used stock sales proceeds to purchase a home that was placed in a family trust, and paid taxes to the Internal Revenue Service out of the same account. Simple, right? No, of course not.

Another less complicated, but more common situation would be when one spouse owned a home as separate property prior to the marriage, but subsequently refinanced the home during the marriage at which time both parties names were placed on the title to the home. Although clearly, this is a less challenging fact pattern than the example above, the separate property claimant must prepare a thorough and careful examination of all of facts and documents (which would include loan documents, title documents, appraisals, trust documents etc.) in order to support a separate property right of reimbursement.

Expert Analysis

While not all tracing matters require expert analysis and testimony, many of these claims do require experts. Very broadly, if an expert has the ability to provide an opinion to the court that will assist the court in its understanding of evidence (the stock tracing example above is a case that would require expert analysis that would assist the court) then such an expert should be made part of the tracing team. Ford Family Law works with respected, knowledgeable and experienced experts, including forensic accountants who understand California community property reimbursement and tracing principles and who have the ability to present cogent and persuasive analyses to the court.