A spouse who commingles separate assets with community assets has the burden of tracing their separate property interest to get reimbursement in a divorce.

A spouse who commingles separate assets with community assets has the burden of tracing their separate property interest to get reimbursement in a divorce.

In the case of Marriage of Simonis, the Court of Appeal of California, Third Appellate District, issued a decision that addressed the commingling of marital and separate property during divorce. In that case, the court ruled that the spouse who commingles the assets has the burden of tracing their separate property interest. In this case, the husband failed to meet that burden, and the court divided the bulk of the community estate accordingly. Marriage of Simonis (9/26/23) 95 Cal.App.5th 1129 (CA-3).

The facts in Marriage of Simonis centered on the division of marital assets following a 27-year marriage. During the separation, the husband, Alan Simonis, maintained control of several community assets, including cash on hand, crop income, and cattle. He subsequently commingled these assets with his separate property. At trial, the court applied the established principle regarding tracing commingled funds in marital estates. The court determined that Alan failed to demonstrate his separate property interest in the commingled assets. As a result, the court divided the majority of the community property according to California's community property law.

The court's decision in Marriage of Simonis highlights the importance of maintaining separate accounts for community and separate property, especially during separation. When commingling occurs, the burden falls on the spouse who did the commingling to prove their separate property interest through tracing. There are two methods of tracing. One tracing method is called direct tracing. A second method is called recapitulation. A forensic CPA expert is usually retained to perform the tracing. Failure to do so can result in the commingled assets being treated entirely as community property.

Marriage of Simonis serves as a reminder for California divorcing couples about the legal implications of commingling marital and separate assets. Spouses should be mindful of maintaining separate accounts during separation to avoid potential difficulties in dividing marital property. The problem with commingling can be avoided if divorcing couples open a new account after separation so that post separation earnings are not commingled with community assets.

Please note that this article is not legal advice and is not intended as legal advice. The article is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic discussed. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article does create any attorney client relationship between you and the Law Offices of Kenneth U. Reyes, APC. This article is not a solicitation.

Attorney Kenneth Ursua Reyes is a Board Certified Family Law Specialist. He was President of the Philippine American Bar Association. He is a member of both the Family law section and Immigration law section of the Los Angeles County Bar Association. He is a graduate of Southwestern University Law School in Los Angeles and California State University, San Bernardino School of Business Administration. He has extensive CPA experience prior to law practice. LAW OFFICES OF KENNETH U. REYES, APC is located at 3699 Wilshire Blvd., Suite 700, Los Angeles, CA, 90010. Tel. (213) 388-1611 or e-mail kenneth@kenreyeslaw.com or visit our website at Kenreyeslaw.com

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