After people get married, they generally share their resources and their responsibilities. Spouses often buy homes together, save jointly for retirement and may both deposit their paychecks into the same bank account.
Most people understand that they may need to divide their marital property during a divorce. They either need to work out a settlement or prepare to present the matter to a family law judge. People can often preserve some of their resources as separate property when they divorce.
Gifts, inheritances and assets acquired prior to marriage can remain the separate property of one spouse after a divorce. What many spouses contemplating divorce may not understand is that certain actions during a marriage could put their separate property at risk. Commingling is the technical term for actions that convert separate property into marital property.
What constitutes commingling?
There are many actions that can lead to claims of commingling during property division proceedings. Adding a spouse as a co-owner to a high-value asset or a financial account can endanger those resources during a divorce. Depositing separate funds into a shared bank account has the same effect.
In some cases, commingling involves the use of marital income or assets to maintain or improve separate property. Sweat equity on the part of the non-owner spouse, such as the routine performance of large home maintenance projects, can also lead to claims that previously separate property is now part of the marital estate.
What impact does commingling have?
In scenarios where one spouse can credibly assert that commingling occurred, the commingled assets may be at risk of division. Even if the courts allow the spouse who owned those assets originally to retain them, they may have to account for their value when settling other property division matters. Commingling can complicate divorce proceedings and make it much more difficult for spouses to agree on what they have to divide and how to do so fairly.
Learning more about the nuances of asset division matters can be beneficial for those preparing for an upcoming divorce. Both individuals asserting that commingling occurred and those trying to fight claims of commingling may need help preparing for property division proceedings, and that’s okay.
