Tracing separate property in CaliforniaSince property acquired during marriage is presumed to be community property, the party claiming that a particular asset is separate property, must be able to show the source of that asset. The spouse must show where that property came from-- trace it to its source. In many situations, your separate property can be mixed with community property. For example, you have a bank account before marriage, and after you get married, you deposit your earnings into the account and use that account to pay your joint bills. Is the account still separate property or has it become community property? What is the proportion? What if you use of funds in that account to make a down payment on a house? If you can't clearly identify the separate property source, then the community property presumption will prevail. There are two methods used to trace separate property when it has been commingled with community property. Under the direct tracing method, you must prove a direct link to the separate property and the funds used to purchase it from the commingled account.
The second method looks at your family living expenses and presumes they are paid out of community funds. If it can be shown that, when you purchased the asset, all community income in the commingled account has been exhausted by family expenses, the remaining funds will be separate property.
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