Can Separate Property Become Community Property? 9

Commingling: Mixing “Mine” With “Ours”

Separate property includes assets, both real and personal, that were either owned by one spouse prior to the marriage or were acquired through an inheritance, as a gift or purchased with funds that are separate property.

Separate property can however, become community property (property equally owned by both spouses) through a process called “commingling.” This happens when separate property is mixed or “commingled” with community property. If, for example, a spouse deposits his inheritance into a joint bank account where both spouses make withdrawals and deposits, the inheritance could at some point be considered “commingled” and part of the marital assets.

In order for a court to distinguish separate property from community property, you would have to be able to show a clear paper trail that tracks the property back to the point it was considered separate, such as deposit slips or other documents that identify the property. Even then, if the property is liquid, it is impossible to differentiate between funds which were initially separate property and marital funds – especially after multiple deposits, withdrawals and market gains or losses are considered.

You could also retain your rights to your separate property through a pre- or post-nuptial agreement . If for example, you used your inheritance to make a down payment on the family home, you and your spouse could agree in a written agreement that the down payment money was your separate property and in the event of a divorce, you would be reimbursed for the down payment.

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