New case law in California has changed the way that courts will address a “non-managing” spouse attempting to charge the other spouse of misappropriating community property assets. In Marriage of Margulis, the Fourth District Appellate Court held that when a showing is made about the existence and value of community assets in the control of the other spouse after the spouses have separated, the burden of proof shifts to the controlling spouse to show the proper disposition or the lesser value of the assets.

Why is this important? In many cases, one spouse may yield all the power in a relationship and continue to exercise that control after the spouses are living “separate and apart” but before the divorce is finalized. Previously, when the controlling spouse misappropriated community assets in their control and the other spouse attempted to charge the controlling spouse with the assets, no case law required that the burden shift to the controlling spouse to prove the assets were disposed of properly. It will now be more difficult for a controlling spouse to squander community assets and walk away without answering for their actions.

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