FL-142 savings/retirement accounts- separate vs community

#1

Hi,

A few questions regarding designating financial accounts as community vs. separate property:

  1. I have a savings account (“New Savings”) that was opened after my marriage; however, 100% of the funds in it came from a different personal savings account (“Old Savings”) I opened prior to my marriage. I understand that typically an account opened after marriage would be considered community property, but I am wondering if I have grounds to claim it as separate property given I can trace all deposits into “New Savings” from “Old Savings”, and I can prove that my savings in “Old Savings” at the time of my marriage covers the current balance in “New Savings”. Both of these accounts are solely in my name.

Related question-

  1. Do I have to list “Old Savings” as community property because I contributed to it during the marriage (I deposited my paychecks into a checking account and then transferred money from there into the savings account)? Or can I claim the before-marriage balance of it as separate and during-marriage contributions as community? I had a decent savings in place before the marriage.

  2. I have a 403-B retirement account through my job, which I started before I was married and continued through the marriage and now after separation. Do I list the entire account at community property?

Thank you in advance for any help you may provide. There is so much great information on here.

#2

  1. You definitely have grounds to claim that the account has your separate property funds in it. The definition of community versus separate is factual and has very few exceptions - it all has to do with WHEN something is opened. That is a different question than whether or not the funds in the account are community are separate. You will definitely need to provide all the paperwork showing that the funds are your separate property.

  2. Your question here is notably inconsistent with the facts you presented above. Above, you state that the ONLY funds in the account are funds you had prior to marriage. That is an easy tracing issue to prove that the funds are all separate. In this question, you seem to say that the account is mixed. While there were funds that existed prior to marriage, you’ve continued to contribute to that account during marriage. That creates significantly more complications. Now, you have to be concerned with withdrawals from the account, along with deposits.

Let’s say that you had $10,000 of pre-marital funds in that savings account, and you now have $20,000 in the account. The “easy” analysis is that your separate share is $10K, and the community share is $10K; however, that’s not good enough. You ALSO have to prove that the account never dipped below $10,000. If it did, you separate funds were used (exhausted), and community funds replenished the account. So, if you had $10,000 of pre-marital funds, but sometime during marriage, the account balance dipped to $5,000, but it’s presently $20,000 in the account, there is only $5K of separate money left, and the remaining $15K is community. Once separate funds are spent, they’re gone - they don’t get reimbursed unless the money was used to acquire property.

  1. A 403B account started before marriage is separate property. There is a community interest in it, since there were contributions during marriage.
#3

Thank you so much for the response. I think I understand…

There never were any withdrawals from the New Savings account since it opened… so if I understand correctly, it should be easy to trace the initial balance to pre-marital funds, and then anything that got added to the account after that including the interest would be community property. How then would I indicate that on FL-142? Would I list it twice- one as community and one as separate?

I guess I want to similarly clarify if, on FL-142, I would then designate the 403B as separate property even if there is community interest in it? Part of my confusion comes from the fact that my ex (petitioner) and her attorney did not designate any of her banking accounts or retirement accounts as separate property on her FL-142 even though some came from before our marriage

#4

I would indicate the account as separate property if it meets the definition of separate property, but clarify in the description of the account that there is a community interest in it.

As for your ex’s paperwork, sometimes there is a lack of understanding of what the form requires. Attorneys only know what is disclosed to them, so if your ex doesn’t understand the difference between separate and community property, it’s very possible there was an error. Sometimes it’s simply a matter of sloppy drafting. There are a multitude of reasons why they might have completed the form the way they did. At the end of the day, regardless of what is or isn’t on the disclosures, the community assets have to be divided. Doing the forms properly makes the division analysis clear, and forms with mistakes on them cause confusion and delay.