Characterizing “other” Property Interests – Just when you thought there could not be more examples of property characterization, I throw more in.
I know, I’ve done four of these blogs on everything from wages to life insurance policies, and it feels like the topic that will never end. But truthfully, I care about your best interests whether you are a client or not, and it is worthwhile information in bite-sized pieces that you can only get here.
Remember that there will always be some piece of property that needs to be properly characterized during a divorce. Some you would never dream of, and I’ve only scratched the surface over the last few weeks.
Here are seven “other” property interests that may or may not be subject to characterization.
Then we can move on to the next topic, I promise.
Appreciation of Property – An increase in the value of property resulting from either appreciation or from fortuitous causes such as market fluctuations or natural growth DOES NOT change the character of that property. So, if we are talking about mutual funds that have been deemed separate property, any increase in the value of said mutual funds is also separate property.
Debt – There is a community-property presumption for debt, though as we have learned, the character of any debt depends on when it was incurred (before, during or after marriage). If insufficient evidence is introduced in court to properly identify when the debt was taken on, it is presumed to be community.
Gambling winnings – Even if you stick the money in the machine yourself, or purchase a lottery ticket on your own, gambling winnings are treated like income from property and are considered community property if won during the marriage. This is true even if the money used is separate property.
Tim Cole Act compensation – Here’s an interesting one I imagine you have never thought of. This act provides a person who has been wrongfully incarcerated with an administrative remedy to seek monetary compensation from the state for the period of wrongful imprisonment. This is NOT subject to division as marital property and is considered separate property.
Interest – Interest is treated like income, and its character is based on when it was earned. If it was earned before marriage, it is separate property, while interest earned during marriage is community property.
Livestock & horses, and pets – Can be characterized as separate or community property based on inception of title and tracing.
Stocks – Stocks can be characterized as either separate or community property, and are also determined by inception of title – when they were first acquired. The date of inception is the date of purchase.
Again, the last few blogs don’t cover absolutely everything, but I think you may have the right idea based on what we have discussed. If there is something we have not covered that you need further explanation on, please contact our Nelson Law Group, PC office to let us know.
We also have an extensive history of blogs like this one covering a broad range of individualized topics. We will be glad to help you in any way we can.