Separate Property Tracing

When community and separate property are commingled the separate property loses its separate character unless the owner of the separate property can trace his/her property. Community and separate property may be commingled in a bank account, stock brokerage account, or in many other types of assets. Successfully tracing separate property requires the existence of the documents verifying the origin of the separate property and the path of the separate property into and out of various accounts from the date of origination until the date of the acquisition of the asset in question. A forensic accountant performs the tracing. Tracing can be time consuming and expensive. The greater the number of accounts and the greater the number of years to be analyzed—the more costly the tracing.