Separate property in California divorce law is property acquired before marriage or after the date of separation and property inherited during the marriage or otherwise received by gift. Generally, income from separate property is separate property, and property acquired with separate property is separate property.
Community property is property acquired during the marriage. All property generated by a spouse’s time, talent, and energy is also community property. Usually, property acquired with community property is community property, and income from community property is community property.
For example, if a spouse is an artist, all art created prior to marriage is the spouse’s separate property. All art created during the marriage, regardless of when it is actually sold, is community property. A divorcing spouse should photograph and make an inventory of all art created during the marriage that exists at the time of separation. When this art is sold, the proceeds are community property.
Some property may be mixed: it is part-separate and part-community property. For example, if a spouse worked at the ABC Company prior to and during marriage and contributed to a 401K Plan every year they worked, that asset is mixed. In this example, if $30,000 was contributed prior to marriage and $50,000 contributed during the marriage, the employee spouse’s interest (without considering the rate of return) is $55,000 ($30,000 (all separate) + $25,000 (one-half of the $50,000 community)) and the non-employee spouse’s interest (without consideration of the rate of return) is $25,000 (one-half of the $50,000 community).
The spouse who claims a separate-property interest in an asset has the burden to provide the evidence necessary to substantiate the claim. This is usually accomplished by a process called “tracing”, which requires the spouse claiming the interest to trace the asset to its separate-property source. For complex tracing, forensic accountants provide an auditable report to establish the separate-property interests.
Pauline Rosen is a divorce attorney and the founder of the Law and Mediation Offices of Pauline Rosen, located in the South Bay (Los Angeles), providing compelling, competent advocacy with compassionate client-centered legal services, including family law, collaborative law, and mediation. She is the recipient of the American Jurisprudence Award in Ethics, Counseling and Negotiation and in Criminal Procedure and is listed in Who’s Who (1999).