Divorce Separate Property Credit Requires Proof And/Or Testimony

Often divorce lawyers will be told in a contested divorce that one spouse contributed monies or assets obtained prior to the marriage or received under certain exceptions during the marriage (for example from inheritance, gift or personal injury compensation) toward the acquisition or maintenance of either a marital asset or the separate property of the spouse. For example, one spouse had $100,000 in a bank account in sole name before the marriage and with the other spouse they bought a house during the marriage and the $100,000 was used as the down payment. Another example would be that the house was owned prior to the marriage by one spouse and kept separate but the other spouse with the $100,000 used the separate money to pay off the mortgage on the house.

The divorce lawyer of the spouse who used the $100,000 will want their client to be paid back whether the house is marital or separate property. When the funds came from a financial institution, it may not be that difficult to prove that the monies were there before the marriage (or the source during the marriage) and that they were kept separate until they were used for purchase or the mortgage payoff in the above examples. The house closing statement may have copies of the checks and will acknowledge that monies were used for the purchase. The mortgage statement will show that the mortgage was paid off with a large sum.

The case is more complicated when the records no longer exist due to age or the spouses cannot agree on the source of the funds used for the above examples. If there are no documents and no other witnesses, then the court will have to rely upon the oral testimony of the litigants and make a determination based upon credibility (who does the judge believe). However, an experienced divorce lawyer will also be familiar with the "no other source" argument.

The "no other source" testimony is essentially that other than the use of the pre-marital $100,000 (or the above exceptions from marital property) the two people had no other realistic way that they can account for $100,000 being saved or accumulated but for the reason offered by the person who wants the credit. In this situation the spouse who wants the credit testifies that what their income was, what savings they had, what debts they had and then that the only way they had the money was from the separate account. The court will then likely be convinced that the source was as stated. The burden then will shift back to the denying spouse to prove that there was a different source for the monies.

Correct equitable distribution when contested requires thorough document preparation and authentication and clear concise testimony to guide the court to the proper result.