California law is relatively specific when it comes to the division of property, but decisions often require significant accounting and investigation. A brief review of the how the courts might classify and divide post-marital property often alleviates the frustrations associated with the process. These topics also provide the basis for insight into potential divorce outcomes, as the court tends to treat community property differently than it does pre-marital holdings.
Generally speaking, divorce litigants hoping to establish an asset as nonmarital property must trace the asset back in order to prove ownership. In Community Property in California, Grace Ganz Blumberg outlines the two major California tracing methods:
- Direct tracing of funds to pre-marital holdings in the account
- Indirect balancing of family expenses against marital property in the account
Divorces anywhere might involve examination of property, but the various states have different requirements for asset tracing during proceedings. J. Thomas Oldham mentions in Divorce, Separation and the Distribution of Property that California courts subject funds in bank accounts to some of the strictest examinations in the country. In every case of a withdrawal of funds, the withdrawing spouse must show that he or she used the money for family expenses or else assign the loss to his or her own separate property.
The standards are high in California for proving shared expenditures from complex assets. However, if the withdrawal is shown to be associated with a family expense, the loss may be assigned to the community rather than the separate estate. This might, in turn, assist in the indirect tracing of separate funds in the shared account or asset.