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Separate Property Owner Must Prove: The Burden of Proof

Written by Wolfgang R. Anderson

Attorney at Law

Anderson, Fields, Dermody & McIlwain

Where separate property funds have been so commingled with community funds that it is impossible to differentiate between them, all of the funds become community property. Bank accounts provide the best example.

Often spouses use bank accounts which existed prior to marriage or contained inherited money (by definition, separate property). After marriage, earnings or wages may be deposited into them and/or funds withdrawn (i.e., an in and out process). It could also be a bank account opened after marriage and into which separate monies are deposited. Most likely the comingling occurs in a checking account into which deposits are made and from which frequent dispersals are made. Chances are slight a segregation of community and separate funds could withstand any scrutiny. It is possible, but highly unlikely. The result is the creation of a community bank account, even if it is in the name of only one of the spouses. On the other hand, if there are few dispersals and clearly traceable deposits of large chunks of separate property, a segregation could be successfully conducted. It will remain separate.

Separate deposits to a joint account that are in and out likely can be preserved, especially if the account doesn't dip below the separate amount and the in and out activity takes place within a short time ... 60 days (i.e., if a joint account becomes a holding account for but a short time).

Our law states that parties have an interest in money not accounts so that an account is nothing more than a repository. Therefore separate money placed in both names for a short time period and then withdrawn can still be labeled as separate (however, caution must be advised, for some judges could take the opposite view).

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Anderson, Fields, Dermody & McIlwain, Inc., P.S.

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