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Tracing Assets to Avoid Transmutation in California Divorces

When you divorce in California, you get to keep property that is characterized as separate, and you have to equally divide property that is considered marital community property. So it makes a big difference how you characterize every piece of property in divorce.

And it can be a very confusing issue. Property can start out as one type and be transformed into another. This can happen through a formal transmutation agreement or in other ways such as when different types of assets are commingled.

If you have separate assets that may appear to be community assets, you want to take the right steps to protect your interests in that property, and that often involves tracing those assets. Assistance from an experienced attorney makes this process much easier.

Understanding Transmutation in California

In California, property owned by either spouse prior to the marriage remains their separate property unless it is transmuted into community property. Transmutation involves changing the character of an asset either through a written agreement or by the way it has been handled. For instance, spouses might sign an agreement stating that a business started by one of them before the marriage should be considered marital property owned by both of them.

If an asset has been mixed with marital assets, it may be considered transmuted. This can occur if a spouse puts separate funds into a joint account. Our experienced attorneys can help clarify if your assets have undergone transmutation and develop the best arguments to achieve your goals for property characterization and division.

The Importance of Tracing Assets in a Divorce

Tracing refers to the process of tracking the origin and journey of an asset to determine if it should be treated as separate or community property. This can be quite crucial in situations where an asset has been commingled with marital assets. The team at our San Diego law firm can assist you in tracing your assets, allowing for a fair division during your divorce.

The tracing process can be a complicated endeavor, requiring extensive record-keeping and a keen understanding of California law. Records such as receipts, account statements, and property deeds can be invaluable during tracing. Our team can help you gather the necessary documentation and guide you through this complex process. In some cases, we work with forensic accountants to establish the origins and history of separate assets.

Avoiding Transmutation with Help from Holstrom, Block & Parke, APLC

You deserve to keep property that is rightfully your separate property, but proving your property is separate can often be a challenge. While it is best to keep your separate and marital assets distinct, in the real world, this can be difficult, and that’s where asset tracing can be particularly important.

If you're unsure about the status of your assets, you need a divorce attorney experienced in asset tracing and division. Call us at Holstrom, Block & Parke APLC today at (410) 590-9401 or contact us online to schedule a consultation with a knowledgeable divorce lawyer in Southern California.

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