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Divorce and Navigating Separate vs Community Property

By Don Schweitzer

What's mine is mine and what’s yours is mine is a common misconception spouses have when going through a divorce and dividing property.

In reviewing a recently published decision, entitled in re Marriage of Bonvino, we are reminded that the law provides for the preservation of spouse's separate property rights, so long as certain facts can be proven by the spouse who has the separate property claim.

In Bonvino, prior to marriage Mr. Bonvino owned a house in Long Beach and had a large amount of money held in bank and liquid investment accounts. When he married, he and his wife lived in Mr. Bonvino's Long Beach house until they decided to purchase a home in Westlake Village to be closer to Mr. Bonvino's job and where the parties wanted to raise a family.

Mr. Bonvino made a down payment on the Westlake Village property with money he had prior to the marriage. He also took out a loan for the remaining balance on the mortgage and convinced Ms. Bonvino to sign a quitclaim deed to him, so that he could take title to the property as his sole and separate property.

For the next fifteen months Mr. Bonvino paid the monthly mortgage using community funds (i.e., money earned during the marriage until he paid off the balance with proceeds from the sale of his Long Beach home.

After twelve years of marriage, Ms. Bonvino filed for divorce at which time she claimed the Westlake Village property was a community asset because it was purchased during their marriage (invoking the community property presumption), and that Mr. Bonvino was only entitled to a dollar for dollar reimbursement for the separate property proceeds he used to make the down payment and pay off the mortgage.

Unfortunately for Ms. Bonvino, the Court of Appeal disagreed, holding that since the down payment was traceable to Mr. Bonvino's separate money and he took title to the property as his sole and separate property, and never transmuted to the community, Mr. Bonvino maintained a separate property interest in the home.

The Court of Appeal also determined the community had an interest in the Westlake Village home, due to Mr. Bonvino's use of community money to pay the mortgage and there was no transmutation of the community interest into Mr. Bonvino's separate property.

The end result of this decision is Mr. Bonvino took much more of a share of the proceeds from the sale of the Westlake Village property than he would have if he was only entitled to a dollar for dollar reimbursement, because the Court ruled the separate and community interests in the property were to be shared on a pro rata basis in proportion to the separate and community funds invested in the property.

The lesson divorcing spouses can learn from this decision is what is yours is yours and mine is mine, so long as it can be proven. Otherwise, we own it equally.

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