Tracing Separate vs. Community Property: A Step-by-Step Breakdown for Family Law Attorneys and their Clients
By: Eli C. Neal
When marital estates are complex and high-value, family law attorneys often face one of the most time-consuming challenges in divorce litigation: distinguishing separate property from community property.
Proper tracing is the cornerstone of protecting a client’s separate property—yet it’s also one of the areas where documentation and recordkeeping can be incomplete and mistakes can dramatically shift the outcome of a case.
Below is a clear, attorney-focused breakdown of how tracing works, what methods courts accept, and how to prepare a case for a successful financial forensic analysis.
Why Tracing Matters
In community property states, the default assumption is that property acquired during the marriage is community. To overcome this presumption, a spouse claiming an asset as separate property must provide clear and convincing evidence. Accordingly, a detailed tracing analysis becomes essential.
The Step-by-Step Tracing Process
1. Identify the Claim
The first step is understanding exactly what the client is claiming as separate property. Common examples include:
Pre-marital savings or investments
Inherited funds
Gifts from relatives
Proceeds from separate property sales
Compensation tied to pre-marital efforts
A strong tracing engagement begins with a precise inventory of what the client asserts, when it was acquired, and how it was used over time.
2. Collect Relevant Financial Documents
In order to support the separate property claim, we work with the client to collect contemporaneous records such as:
Bank statements (all pages)
Brokerage/retirement statements
Wire confirmations
Purchase and sale documentation
Escrow papers
Tax returns
Transaction-level records
Tip for attorneys: Request statements beginning on the date of acquisition (for property) or as of the yearend prior the marriage or CIR to provide historical visibility.
3. Perform the Tracing
Even when separate funds enter a joint account, they can still retain their character if they can be traced.
Examples of joint account patterns we investigate:
Separate inheritance deposited into joint checking
Pre-marital investment accounts that are deposited with marital earnings
Joint accounts funding the down payment for a home
Separate business income deposited with marital earnings
We look at the pro-rata separate and community percentage of funds in the account to determine the character.
4. Prepare Exhibits for Mediation or Court
Attorneys, Mediators, and Judges benefit most from clear, visual, courtroom-ready deliverables.
We typically prepare:
Account flow summaries
Timeline charts
Transaction tracing tables
Separate vs. community allocation exhibits
Written expert reports explaining the facts and methodology
Strong exhibits make complex financial histories understandable to mediators and judges.
What Attorneys Can Do to Strengthen a Tracing Claim
Here are practical steps that dramatically improve outcomes:
1. Collect full statements early.
Missing months create vulnerabilities.
2. Ask clients for source documents—not screenshots.
Courts prefer official bank-generated PDFs.
3. Narrow the scope.
Be specific. “I think I had $30k before marriage” is not as actionable as “this is the account, here are the statements, here’s the date” is.
4. Understand the standard of proof.
Separate property claims require clear and convincing evidence. Advise clients early about documentation expectations.
5. Bring in a forensic accountant before discovery closes.
Tracing analysis will likely take 3 to 6 months, given the documentation required. Last-minute rush projects are not realistic.
Final Thoughts
Tracing separate vs. community property is one of the most critical elements in divorce litigation. With the right records, methodology, and expert testimony, attorneys can present a clear narrative grounded in evidence rather than estimates.
A thorough tracing analysis not only strengthens a client’s case but often leads to faster settlements and fewer courtroom battles.
4 Corners is located in the Greater Seattle area, serving clients in Seattle, Bellevue, Redmond, and all throughout the Pacific Northwest. If you are an attorney or business owner and believe you could use our help, please give 4 Corners a call at 425.800.4896 or email us; we’ll listen to your situation and help you scope your project.
We’d love to help you.