The Art of Tracing

Tracing, as used in Family Law matters, is an accounting methodology used to determine the separate or community property interest in assets that are acquired during marriage. This methodology enables a spouse to recover separate funds either through confirmation of an asset as separate property, apportionment or reimbursement. Tracing can also be used to rebut the opposing spouse’s separate property contentions, or used to determine the amount ofcommunity property used to reduce the principal balance of a mortgage on a spouse’s separate property. It can also be used to determine community expenditures for improvements made on one spouse’s separate property. Until recently, said community expenditures were presumed to be a gift as long as the husband/wife had knowledge of said expenditures. Where property is presumed to be community, tracing is the methodology used to satisfy a party’s burden of proof. Without tracing, a spouse seeking to prove the characterization of an asset acquired as separate will be unlikely to meet the burden of proof. This article provides an overview of the laws governing tracing and/or reimbursements with suggestions on how to deal with a variety of tracing situations.

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Moore/Marsden Was Just The Beginning

Some may be aware that I have devoted over 20 years of my professional career in the area of tracing, including related issues of allocation and reimbursement matters. The allocation of community and separate property interests in a family residence and other real property holdings is a constantly evolving area of family law. The body of knowledge as presented begins in 1980 with the ruling in Marriage of Moore and since that time has been expanded and better defined under additional rulings by the courts on a frequent basis...

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