Recovering The Separate Property Funds You Brought Into The Marriage

What you had before you got married is yours, not your spouse’s, not the community’s, yours. Sounds simple, right? If you keep diligent records, it could be. Most people, however, do not and it turns into anything but a simple process.

Let’s say, for example: Your Great Aunt Mildred left you $100,000 in her will and you inherited it one year prior to getting married. You put it in your bank account but as soon as you got married, that bank account became a joint account that both you and your new spouse deposit and withdraw money from. Money goes in and out of that account on a daily basis. Herein lies the problem. That $100,000 has now been “commingled” and you now are stuck with the burden of tracing the $100,000 to a time prior to marriage and determining that the money coming into the account and leaving the account was only the money acquired during marriage and not your inheritance money. This can be a burdensome task and in some circumstances, requires the expertise of a forensic accountant.

In order to be successful in recovering the money dear old Aunt Mildred left you, you have to be able to show that the money coming into the account during marriage by paychecks or other income-producing means exceeded the amount of money that was leaving the account during marriage for bills, entertainment, household expenses, clothing, etc. Additionally, you need to be able to trace the funds still left in the account to a time before you were married and before the account was commingled. So, if you’re alleging that you had an inheritance of $200,000 but only have proof of $100,000 in the bank before marriage, the most you could claim as your separate property would be $100,000. Banks only keep bank statements for up to 7 years, so tracing gets even more difficult and sometimes impossible when substantial periods of time go by. Unfortunately, in an account with commingled funds, if you can’t prove that the money was there prior to marriage and are able to trace it, Aunt Mildred’s money is the community’s money now.

The easiest way to avoid having to trace the funds is, of course, to keep the account with your inheritance separate and keep copies of annual or monthly statements. If you have the proper documents, determining that your separate property is your separate property could save you a lot of headaches.