The Art of Tracing by Pamela Wax-Semus

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 of community 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 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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