Tracing
The process of proving that a specific asset originated from a spouse's separate property, even after commingling — used to preserve separate-property status.
When separate property has been commingled with marital property, the spouse claiming separate status can sometimes preserve it by tracing — showing through records that a specific dollar amount came from a separate source. Tracing requires bank statements, deeds, gift letters, inheritance documents.
Tracing rules vary by state. Some states apply community-property "out-first" or "in-first" rules; others use proportional tracing. The practical lesson: keep records, and keep separate accounts separate. A prenup can reduce the need for tracing by stating clear rules upfront.
Related terms
- Commingling — Mixing separate property with marital property in a way that makes them indistinguishable — often resulting in the separate property being treated as marital.
- Separate Property — Property owned by one spouse individually — typically property owned before the marriage, plus gifts and inheritances received during the marriage.
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