WHAT RIGHTS DO I HAVE TO COMMINGLED PROPERTY?

I frequently receive questions from people regarding their family law issues. The following is a question which the inquirer agreed may be publicly revealed, and my answer to the question:

QUESTION: I am divorcing my husband after 23 years.

My mother in law died 10 years ago. We discovered that she had 3 life insurance policies totaling about $240,000.

We immediately put the money into a joint CD. We then sold our house and bought a new one with some of the CD and proceeds from the old house for the down payment. We left the rest in our joint CD. We just sold the house and made a good profit of about $220,000.

My husband is claiming that all the money in the joint CD is his and that he gets the money we used from the CD for the down payment. Then we would split the remaining profit. He would walk away with about $290,000 and I would get about $50,000.

The money in the CD has been commingled many times, adding and taking money out over the years.

Is it possible that he gets away with this? We both worked full time through the marrige and jointly paid the mortgage

ANSWER: The inherited money is (or was) your husband's separate property.

Because the inherited money was put into a joint CD, your husband likely transmuted the inherited funds into community property, subject to his right of reimbursement pursuant to Family Code 2640 of TRACEABLE separate property contributions.

It would be your husband's burden to trace his separate property contributions to the funds that remain in the CD if funds were taken out of the CD and community funds (such as earnings of you or your husband) were added to the CD, commingling community and separate funds. Only to the extent he is able to trace remaining CD funds to his separate property contributions, would he be able to persuade the Court to award the traceable amount to him as his separate property.

The new house is communty property, subject to your husband's right of reimbursement pursuant to Family Code Section 2640 of TRACEABLE separate property contributions. If he can trace a paper trail from his inheritance funds to the down payment, he would be entitled to reimbursement of the traceable separate property funds, from the net proceeds from the sale of the house. The balance of the net sales proceeds would be community property.

This educational blog is brought to you by DONALD F. CONVISER, an effective and aggressive Los Angeles Divorce Lawyer and Family Law Attorney serving clients in the courts of Los Angeles and Ventura County for over 35 years,owner of Warner Center Law Offices, with offices in Woodland Hills and Century City. Call 888.632.4447 or 818.880.8990 for a free confidential consultation with a Certified Family Law Specialist to discuss your divorce or family law issues. www.conviser.net.