What is tracing in a divorce action?

Tracing is the exercise of following the asset trail.  If an asset can be traced to a particular source, the Court relies on other principal and rules to determine whether the traced asset is divisible or not divisible.  That the existence of subsequently purchased property can be traced to income generated by non-divisible property that is gifted or inherited does not mean that the purchased property is non-divisible.  Once property is transferred from separate property to joint ownership, the property becomes part of the marital estate subject to division.