What methods are available to a California family law litigant to prove that a particular asset is there separate property (rather than community)?

A party in a California dissolution action can request that the Court deem a particular asset their separate property if they can trace the acquisition of that asset back to a separate property source. Tracing can become problematic when separate funds are commingled with community funds. There are two well established tracing methods. The first method is referred to as “direct tracing” where a party can show/trace the funds from one account to another to the ultimate acquisition. The second method is the   family expense tracing method whereby funds used from an account are deemed to for the benefit of the community and the remaining funds are separate. The Court in  IRMO Cipari (2/7/19) held that the Court is not precluded from relying on any tracing method other than the two just described.” It said that “(w)e see no reason to straightjacket trial courts by adopting DeeDee’s prohibition of tracing methods other than the two she identifies. Tracing is simply a method of proof. As noted above, trial courts have the flexibility to consider any credible evidence and to evaluate alternative tracing methods to determine whether the proponent of the tracing carries his or her burden of proof. The tracing method may vary depending on the facts. Thus, trial courts are free to consider and credit reasonable, well-supported, and non-speculative expert testimony, when determining whether the proponent has successfully traced commingled assets to a separate property source.”

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