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Another Community Property conundrum
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It is all about tracing. If the money in the account can be traced to separate property or prior to marriage and has not been commingled, it remains separate property.
-----Orig]" Sent: Oct 27, 2015 6:02 PM To: "cdcbaa@yahoogroups.com" Subject: [cdcbaa] Another Community Property conundrum
I have another community property conundrum.
I researched it via family law counsel before filing the case, but now proof is required.
Debtor husband married 8 years ago.
Wife had $40K in bank account. Separate property at the time.
Low balance since marriage in that account was $25K
At time of filing Chapter 7 the balance was $28K
Therefore, $3K is community property. Ergo property of the estate.
However, the Trustee says its all community property. He says all deposits are presumptively community property. But wouldnt all withdrawals also be community property?
My source, an extremely experienced family lawyer told me it was the lowest level in the bucket is the new base for figuring separate property vs. community property, hence the analysis above.
Does anyone have any opinion on this, or some case law that supports this methodology of figuring community property?
Steve
Law Offices of Steven B. Lever
Steven B. Lever
( Tel. (562) 436-5456 ext. 1
( Fax (562) 485-6886
* sblever@leverlaw.com
www.leverlaw.com
The post was migrated from Yahoo.
The Trustee is correct that the money is *presumed *to be community
property. The burden is on your client to trace the funds to separate
property. If we assume that the balance in the account never dipped below
$25,000, you have a very good chance at winning with respect to the
$25,000. You cannot just look at monthly bank account statement balances,
you literally have to look at every transaction.
Tracing to bank accounts uses the LIFO method (last in, first out) unless
the Trustee can show that a particular withdrawal was a separate property
withdrawal.
The funny thing is, historically, people wanted to take advantage of their
former spouses by claiming that separate property is used first (First In,
First Out), before community property! Bankruptcy turns this on its head.
You can read the seminal case on this topic here: In re Marriage of Mix,
536 P. 2d 479 - Cal: Supreme Court 1975
A word of caution regarding reading old family law cases. You have to watch
out for special rules and/or different law. For example, property acquired
before 1975 is subject to the married woman's special presumption. Laws
regarding title differ pre/post 1984 and laws regarding transmutation
differ pre/post 1985.
Sincerely,
*Michael Avanesian, Esq. *
Avanesian Law Firm
101 N. Brand Blvd. PH 1920
Glendale, CA 91203
Tel: 818.276.2477 | Fax: 818.208.4550
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On Tue, Oct 27, 2015 at 6:02 PM, 'Steven B. Lever' sblever@leverlaw.com
[cdcbaa] wrote:
>
>
> I have another community property conundrum.
>
>
>
> I researched it via family law counsel before filing the case, but now
> proof is required.
>
>
>
> Debtor husband married 8 years ago.
>
>
>
> Wife had $40K in bank account. Separate property at the time.
>
>
>
> Low balance since marriage in that account was $25K
>
>
>
> At time of filing Chapter 7 the balance was $28K
>
>
>
> Therefore, $3K is community property. Ergo property of the estate.
>
>
>
> However, the Trustee says its all community property. He says all
> deposits are presumptively community property. But wouldnt all
> withdrawals also be community property?
>
>
>
> My source, an extremely experienced family lawyer told me it was the
> lowest level in the bucket is the new base for figuring separate property
> vs. community property, hence the analysis above.
>
>
>
> Does anyone have any opinion on this, or some case law that supports this
> methodology of figuring community property?
>
>
>
> Steve
>
>
>
>
>
> Law Offices of Steven B. Lever
>
>
>
> Steven B. Lever
>
> ( Tel. (562) 436-5456 ext. 1
>
> ( Fax (562) 485-6886
>
> * sblever@leverlaw.com
>
> www.leverlaw.com
>
>
>
>
>
The Trustee is correct that the money is presumed to be community property. The burden is on your client to trace the funds to separate property. If we assume that the balance in the account never dipped below $25,000, you have a very good chance at winning with respect to the $25,000. You cannot just look at monthly bank account statement balances, you literally have to look at every transaction.Tracing to bank accounts uses the LIFO method (last in, first out) unless the Trustee can show that a particular withdrawal was a separate property withdrawal.The funny thing is, historically, people wanted to take advantage of their former spouses by claiming that separate property is used first (First In, First Out), before community property! Bankruptcy turns this on its head. You can read the seminal case on this topic here:In re Marriage of Mix, 536 P. 2d 479 - Cal: Supreme Court 1975A word of caution regarding reading old family law cases. You have to watch out for special rules and/or different law. For example, property acquired before 1975 is subject to the married woman's special presumption. Laws regarding title differ pre/post 1984 and laws regarding transmutation differ pre/post 1985.Sincerely,Michael Avanesian, Esq.Avanesian Law Firm101 N. Brand Blvd. PH 1920Glendale, CA 91203Tel: 818.276.2477 | Fax:818.208.4550
The post was migrated from Yahoo.
I have another community property conundrum.
I researched it via family law counsel before filing the case, but now proof is required.
Debtor husband married 8 years ago.
Wife had $40K in bank account. Separate property at the time.
Low balance since marriage in that account was $25K
At time of filing Chapter 7 the balance was $28K
Therefore, $3K is community property. Ergo property of the estate.
However, the Trustee says it's all community property. He says all deposits are presumptively community property. But wouldn't all withdrawals also be community property?
My source, an extremely experienced family lawyer told me it was the lowest level in the bucket is the new base for figuring separate property vs. community property, hence the analysis above.
Does anyone have any opinion on this, or some case law that supports this methodology of figuring community property?
Steve
Law Offices of Steven B. Lever
Steven B. Lever
* Tel. (562) 436-5456 ext. 1
* Fax (562) 485-6886
* sblever@leverlaw.com
www.leverlaw.com
I have another community property conundrum.
I researched it via family law counsel before filing the case, but now proof is required.
Debtor husband married 8 years ago.
Wife had $40K in bank account. Separate property at the time.
Low balance since marriage in that account was $25K
At time of filing Chapter 7 the balance was $28K
Therefore, $3K is community property. Ergo property of the estate.
However, the Trustee says it’s all community property. He says all deposits are presumptively community property. But wouldn’t all withdrawals also be community property?
My source, an extremely experienced family lawyer told me it was the lowest level in the bucket is the new base for figuring separate property vs. community property, hence
the analysis above.
Does anyone have any opinion on this, or some case law that supports this methodology of figuring community property?
Steve
Law Offices of Steven B. Lever
Steven B. Lever
(
Tel. (562) 436-5456 ext. 1
(
Fax (562) 485-6886
*
sblever@leverlaw.com
www.leverlaw.com
The post was migrated from Yahoo.