Q. My Wife removed all the money from our joint savings account immediately
before filing for divorce. Some of that money included an inheritance
from my grandmother. What are my rights to recover any of it?
A. When there is a joint bank account in the names of parties who are married,
their net contributions to the account is presumed under the law to be
and remain their community funds. This applies regardless whether the
deposit agreement with the institution describes them as married.
Probate Code section 5305(a).
Affected "accounts" mean a contract for deposit of funds between
a depositor and a financial institution and includes a checking or savings
account, a certificate of deposit, share account, and similar arrangements.
Probate Code section 5122(a).
However, this presumption can be rebutted - as in the case of your inheritance
contributions to the account if you can meet your burden of proof by either
of the following:
- If some or all of the funds on deposit you contend are your separate property
can be traced from separate property (i.e., the inheritance) they will
be confirmed to you unless your wife can establish you made a written
agreement that expressed a clear intent that those sums would become community
property (a transmutation)
- If the two of you made a written agreement, separate from the deposit agreement
itself, that expressly provided that the deposited sums that are claimed
not to be community property were in fact not to be community property
then you will not be reimbursed.
Hence, you need the paper trail for the receipt of the inheritance monies
into this joint account in order to establish they still belong to you
as separate property. As long as you do trace these funds, your wife's
argument that you gifted the monies to her or the both of you by verbal
agreement or by your conduct will not succeed.
However, when monies are commingled over time this tracing becomes more
difficult. Particularly in checking accounts, money comes in from other
sources (like community earnings) and goes out (often to pay community
expenses). The question becomes which money is applied to what outflows?
The law presumes that money that goes out of a commingled account is spent
first on the community needs and expenses, meaning that what remains is
more likely to be considered separate. The law expects the community to
pay community expenses, not that you first use your separate property
- as long as their are sufficient community funds on hand. If these community
funds become exhausted then withdrawals of what is your separate remaining
monies may be lost to the community.
In your situation you have a reimbursement claim for what she took and
you should receive a credit on the marital balance sheet. She may owe
you 100% of the inheritance and 50% of the balance. Your worst case is
that she owes you half of what she took. Immediately begin to collect
the needed bank and inheritance records to prove your claims.
Maintaining records during and after marriage is the most important thing
you can do to preserve and protect your interests. Unfortunately, few
people realize this until after the horse has left the barn.