When you start looking at assets and approaching a divorce, they’re going to fit into two main categories. First, you have marital assets that are owned jointly by both people and need to be divided. Secondly, you have separate assets that each person owns independently, which they don’t have to split up.
But this isn’t always as straightforward as you may assume. For instance, commingled assets can change status. So what is commingling and how does it happen?
Mixing assets together
Commingling is a general term that refers to any steps a couple takes to mix their assets. Once this mixing has occurred, the status can change.
A very straightforward example is if someone has an account with personal funds in it at the time they get married. But after the marriage, they open up a shared bank account with their new spouse. If both people transfer all of their money into that account, even though their savings were initially a separate asset, they have commingled it and turned the entire account into a marital asset.
This can also happen when couples use money to make purchases. An inheritance, for example, is often a separate asset. But if a person uses a portion of their inheritance to pay off a mortgage or put a down payment on a home that they own jointly with their spouse, they’re then commingling the funds. The home that they bought still counts as a marital asset, even though money from the inheritance—a separate asset—was used to purchase it.
Couples will sometimes get into debates over how assets should be classified and what needs to go through property division. If you find yourself in this position, it can help to work with an experienced law firm.
