Tracing separate property or assets in a divorce can be an important issue for lots of individuals. Take a situation where somebody has a 401k or IRA before marriage. They have put money into this account before marriage through their hard work and labor.
They then get married. After marriage, they continue to contribute to this 401k or IRA. At this point, pre-marital separate funds and marital funds are being mixed — or commingled as we would say in the legal industry.
The parties then file for divorce. In these situations, the one spouse is often asking that the entire 401k or IRA be divided in the divorce. The spouse who had funds in these accounts before marriage argues, predictable, that the pre-marital portion should be set aside to them entirely. And they argue that only the funds put in during the marriage should be divided through the divorce.
This argument is a good one in most cases. The reality, however, is that the separate funds need to be traced out from the account. This often requires a forensic accountant reviewing statements and doing an analysis to determine the amount that was in these accounts during the marriage.
At a minimum, parties will need to subpoena the statements from the date of the marriage to try to determine the amount that was in there. However, it can often be hard to obtain statements at the exact date of the marriage.
In addition to 401ks or IRAs, tracing can be important for other assets like bank accounts, investment accounts, whole life insurance policies, and other assets where a party might have built up cash value before marriage. Of course, in some instances, a party might consider having a prenuptial agreement drafted before getting married to ensure the protection of these assets.
If you are going through a divorce or family law matters, Stange Law Firm, PC can help. We have divorce attorneys in Columbia, Missouri, and elsewhere who can help you trace out your separate assets in a divorce or family law matter. You can call us at 1-855-805-0595.