What is tracing?
Updated: Jun 19
Tracing is the vehicle by which a spouse proves that property is separate upon dissolution of marriage. If separate property has been held for a long period of time, it can change form or become commingled with community property. This is when tracing becomes important.
Property on hand at the dissolution of a marriage is presumed to be community property, but this presumption can be overcome if a spouse can “trace” the property back to its separate origin. A spouse trying to prove that property is separate through tracing is subject to a heightened burden of proof. A spouse must trace the property back to the “inception of title,” in other words, when the spouse first had a right of claim to the property. Separate property may change form, but it will usually not change character. This is where the idea of mutation comes in. So, for example, if a spouse has cash that is his or her separate property, and the spouse uses that cash to purchase a home after he or she is married, the cash “mutated” form into the home, but the character of the property remains separate even though the new form of property was obtained during marriage.
There are several methods of proof that may be used in the tracing process. Available methods of proof include spousal testimony, expert testimony, documentary evidence, and inventory documentation. Generally, mere testimony that property is separate is insufficient unless it is corroborated by documentary evidence. An exception to this general rule exists where testimony is not contradicted and the testimony is clear, accurate, and free from suspicion. Even though it is possible that testimony alone may be enough to prove separate character, the testimony of a spouse should always be corroborated by testimony of another witness or documentation. Any documentary evidence used as proof should establish the time and manner by which the property was obtained, and any liquidations, sales, or exchanges of the property.
If you need guidance on what is tracing, contact the Law Office of Robert Tsai, PLLC at 832-278-1995.