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Division of liquid assets in Divorce
Anonymous4 views3 answers
It is my understanding that absent a prenuptial agreement, in a divorce, regardless in whose possession, total liquid assets will be divided 50/50 between both parties. However, should one party produce an asset statement / bank statement dated just before marriage evidencing an asset balance, that balance will be subtracted and awarded to that party as separate property *prior* to 50/50 division of remaining community assets. Absent any community property debt and/or hidden assets, is this correct?
Not exactly. Liquidity is not relevant. Community versus separate us relevant. You seem to be referring to tracing of SP assets, which may be an issue . You really should get some assistance with these issues, as they are not usually intuitively obvious.
This is not exactly right. Community property (including debts) is divided equally by a court - not just the liquid assets. Further, property which you owned prior to the marriage is your separate property and the burden is on you to trace it.
So, for example, if you had $6,000 in a retirement account on the night before the marriage you can trace and value that sum as it is today (if it still exists ) and deduct that from funds in the same account which were added during the marriage.
However, if the separate money has been commingled and no longer exists, just showing that you had separate property once is not going to automatically result in you deducting that sum from the community estate. You may have used the separate money on separate affairs or lost it in the market. I do not know. Further if you used the separate money to improve a community asset, you made have an issue under FC 2640. You will have to be asset specific and do the tracing for that asset. Many scenarios are possible. You should discuss the specific asset with an attorney. If the tracing is complex, many lawyers ask a forensic CPA to render an accounting. As I said, the burden is on you to prove the sum and value of the separate asset.
You are close. The problem here in your scenario is the high probability that the assets may have been co-mingled and in that case it is the responsibility of the party claiming an SP interest to "trace" or provide their SP interest.
