Legal Question in Family Law in California

Appreciation of Seperate Property / Assets

I live in California and am interested in the calculation of seperate property. Specifically, does the appreciation during the marriage of financial assets which are seperate property remain seperate property? If not, is there a way short of a prenuptuial agreement (living trust, etc.) to ensure that the appreciation remains seperate?

Thank you!


Asked on 4/22/04, 5:26 pm

4 Answers from Attorneys

Donald Holben Donald R. Holben & Associates, APC

Re: Appreciation of Seperate Property / Assets

As long as the community is not involved in the asset, the asset and any increase in value in the asset would likely remain separate property. If funds/assets are co-mingled, your chance of keeping them seperate are lessened. Pre-nup is best as you can specifically define assets as seperate, community, etc.

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Answered on 4/23/04, 11:21 am
Damian Nolan Law Offices of Damian M. Nolan

Re: Appreciation of Seperate Property / Assets

The answer is a very definite, "it depends"

If the property is personal property then you must not mingle the property or income derived therefrom with community property. However, that alone is not sufficient to guarantee no community interest. If you or your spouse in any way contribute to the increase in value of the asset then the community will gain an interest.

If the property is real, then if the community contributes to the paydown of the loan principal or is involved in work which increases the value of the property then there is a formula used to calculate the community interest pursuant to the Moor/Marsden formula.

Finally, living trusts have are irrelevent. The way to ensure the integrity of the separate property is to enter into a valid antenuptial agreement.

Regards, Damian Nolan

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Answered on 4/23/04, 12:16 pm
PATRICK MCCRARY PATRICK MCCRARY

Re: Appreciation of Seperate Property / Assets

Generally and with few exceptions separate property and accumulations on separate property remain separate property. It would be worth your time to have a consultation with a family law attorney to explain how and why separate property may become changed to community property or a combination of community property and separate property. You can protect yourself on that issue regardless of whether you have a prenup or a living trust. Good Luck, Pat McCrary

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Answered on 4/23/04, 3:00 pm
Brian Levy, Esq. Law Office of Brian Don Levy

Reply: Appreciation of Seperate Property / Assets

In a general sense, it depends upon if the appreciation is attributable to the efforts of a spouse during the marriage. A living trust has nothing to do with preventing the accumulation of a communnity interest in separate property. A pre-nuptial agreement is the proper document to define under what circumstances, if any, community property is created.

For a specific opinion regarding your individual circumstances, I suggest that you consult with an experienced family law lawyer. Experience is not expensive, it's priceless!

You will find some valuable information on various California family law issues at my web site.

Good luck to you!

Brian Levy, Esq.

www.calattorney.com

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Answered on 4/22/04, 6:20 pm


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