The Paper Trail Always Leads to the Money

Originally published by jennifer long.

The paper trail leads to the money. In a divorce, everything is going to be divided, with a few exceptions: things you had before you got married, things you got as a gift and things you got by way of inheritance are the most common of those exceptions. But even those exceptions can be hard to prove and if you can’t prove something is your separate property by clear and convincing evidence (a heightened standard), the Court will consider it to belong to the community and divide it.

Proving Separate Assets

So how do you prove something is your separate property? With the paper, usually. Let’s take for example a bank account you had prior to the time you got married. It had $50,000.00 in it then. Since the date of your marriage, a lot has happened. You put money into that account from your earnings (community property), you’ve put money in from an inheritance, and you’ve moved money out to pay bills or invest in other ventures. Your job, or more to the point, your legal team’s job, is to trace the money you originally had and the money you inherited right up to today. We’ll do that with paper.

Bank Statements

The first item is the bank statement which shows the balance in that account on the day of the marriage. Then we’ll need to gather all of the statements for that account since then. Without them, all of that money could have been spent in one month and put back in from community sources. The inherited money will need more paperwork; not just the bank statements, but also something showing where the check from the inheritance came from – a cancelled check from the estate, a will, or something else which would show a Judge, clearly and convincingly, that the money was inherited.

Most accounts are used, which means money goes in and money comes out. When you put money into that account which has your separate property already in it, the money becomes comingled. That doesn’t mean it’s hopelessly intertwined with your separate property money, but the more complex the tracing, the more likely a Court will be to find that part or all of your separate estate belongs to the community. The more assets are moved from bank to bank or item to item, the more complicated the tracing gets. If you have the paperwork to support the separate property claim, your experts will have a better chance of preserving your separate property assets. Too many times the necessary documents seem to disappear after a divorce starts, so to the highest degree possible, gather those documents before you start the divorce.

Facing a contested divorce with complex asset and property division? Call our divorce lawyers today to schedule a consultation. Jeff Anderson is board certified in family law by the Texas Board of Legal Specialization and has earned various awards throughout his career.

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