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Tracing is used to establish the nature of tort recoveries. So the nature of the property injured determines the nature of the proceeds to compensate for that injury. Business funds are apportioned according to Pereira and Van Camp or their reverse formulations. For insured property, there is once again confusion. Some hold to strict tracing with insurance premiums being treated as an improvement. Others hold that the funds used to pay the premium determines the nature of the recovery. Personal injury damages are classified at the time the injury is incurred. If separate and not yet married, the recovery is separate property unless part of the recovery is for lost earning during marriage or for community funds used to pay for medical expenses. If the tort occurs while married, the recovery is presumed community under the pro community presumption. California does not permit tracing of pain and suffering damages to pre-community sources. In theory, it may permit tracing for lost body parts but there are no such cases.

If the tort occurs while separated and living apart, it is separate property and any victim spouse who uses community funds to pay accident expenses while separated must reimburse the ...

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