Q: Are SEP-IRA contributions considered marital property if they are paid from a business considered separate property?
I have single member LLC California business that I started before marriage and is considered separate property. During marriage I opened up a SEP-IRA and started contributing money from the business during the marriage. Those are the only contributions to the SEP-IRA and I never used marital assets to contribute to the SEP-IRA. Does that make the SEP-IRA separate or community property during a divorce in California?
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A:
Under California law, property acquired during marriage is generally considered community property, while property acquired before marriage or by gift or inheritance during marriage is separate property. However, there are certain circumstances where separate property can become community property.
In the case of a SEP-IRA, contributions made during marriage from a separate property business may be considered community property if they were made using community property funds or if they were intended to benefit the marital estate. It's possible that a court could view the contributions to the SEP-IRA as a form of compensation or income for services rendered during marriage, which would make them community property.
That being said, it's important to consult with a licensed attorney who can review the specific facts of your case and provide legal guidance based on California law.
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