Gray Divorce: Tracing Personal Property

Gray Divorce: Tracing Personal Property

There are many misconceptions regarding what is being referred to in the media as “gray divorce.” Currently, we have a number of high-profile examples we may draw upon such as the dissolution of Bill and Melinda Gates’s marriage and the break up of Jeff Bezos’ marriage, among others. There is a demographic which has resulted in many cases, where long-term marriages are now moving into divorce.

It’s been named “gray divorce” due to the advanced age of the parties, but there are some important misconceptions on how people who have been married a very long time tend to interpret property laws in community property states. The common notion is that just because you’ve been married a very long time, that everything is community property. This is wrong.

Misconceptions About Community Property

Everything that was acquired during the marriage is presumed to be community property. But whenever you see a presumption in law, it may be a rebuttable position. A statute must explicitly say that a presumption is not rebuttable, otherwise, it is. In this case, community property presumptions are rebuttable.

To rebut a presumption that an asset is community property you need to trace the property to a separate source. So, for example, you’ve been married a long time. You bought a house during the marriage, and you’re assuming that it is 100% community property. But that does not mean that the proceeds from the sale of the house are 100% percent community property.

Examples of Gray Divorce Property Disputes

Suppose you have had the house for ten or fifteen years when you receive an inheritance or a significant gift of some kind and that it is given to you specifically, not your spouse. This is deemed to be your separate property. Now, suppose you put that inheritance into the acquisition of the community estate or to pay down the mortgage. Then, 15 or 20 years later, you find yourself in a divorce. The house is community property, but you have a right to be reimbursed for your contribution to that community property. You will need to trace that contribution to its source and show that it is rightfully yours.

As another example, suppose you’ve been married for a while, but you have a separate house. After some time, you and your spouse decide to purchase another house together. You sell the house that you owned before marriage and put that money toward the new home. Those proceeds into the acquisition of your new property are yours.

Sorting Out Property Disputes in Gray Divorce

These are significant distinctions and they can be a significant problem. Property distinction problems like this come in many forms. One distinction problem can be confused with another, creating a serious dilemma.

What people need to understand is the fundamental community property principle does not mean that you have no separate interest in community property. What it does mean is you need help sorting all these distinctions out from someone who specializes in this area of the law.

An experienced legal professional, specializing in divorce law in common law states can save you enormous amounts of red tape and heartache while ensuring everyone gets what they are entitled to.

If you are entering into a divorce, and anticipate conflicts over common law issues and community property, get in touch with the family law experts at Hartley, Lamas Et Al. We’ll help you to keep what’s yours.