The trust money my husband received was used for different things. First as down payment on our house, and also for home repairs over the years. It was co-mingled in shared bank accounts and used at our discretion. Now in divorce we have to sell the home. He is claiming that any equity in the house that is equal to any money that was put into the house from the trust is his, and that I would not be entitled to the equity left over after the house is sold. I always felt that the money was put in as community money that we used together. Please advise if he is correct, or would I be entitled to equal equity out of the house?
As a general rule, everything acquired by a husband and wife during their marriage is community property. The exception to this rule: a gift or inheritance is separate property. But it remains separate property only if treated separately. Once a gift or inheritance is co-mingled with community property it becomes community property. Your husband has the burden of proof to show which portion of the trust, if any, is his separate property.
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