What is the Commingling of Assets in a Marriage?

• What are marital assets?
• What is separate property?
• Commingling assets in marriage
• Why commingling matters
• FAQ

During a marriage, most of what you acquire is considered marital assets. But is this true of everything you own?

Not always. If you were to get an inheritance, for example, that may be considered your separate property. As such, it may not be subject to property division in divorce … unless you commingled the inheritance with your marital assets. 

What does that mean? Let's explore.

What are marital assets?

Marital assets are assets and property acquired during the course of a marriage. They are considered to be owned equally by both partners in a marriage. These assets are subject to distribution in the event of divorce or separation.

Examples of marital assets could include:

• A jointly owned home or other real estate
• Cars, boats, or other vehicles purchased jointly or during the course of the marriage
• Investments, including stocks, bonds, and retirement accounts
• Valuable personal property such as art, antiques, or collectibles
• Household furnishings, appliances, electronics, and other personal possessions acquired during the marriage
• Business interests or professional practices
• Educational degrees or professional licenses earned during the marriage

It’s important to remember that laws regarding the division of property in divorce vary by state. If you’re facing divorce and marital asset division, you may need to consult a legal professional with expertise in your state’s divorce laws.

What is separate property?

Separate property is property owned solely by one spouse and not subject to division for the purpose of a divorce settlement.

Property may be considered separate if it was acquired before the marriage or given to one person as a gift or inheritance. For example, if one spouse inherited money from a family member during the marriage and kept it in a separate savings account, that money would be considered separate property. 

Another example: If one spouse owned a house before the marriage and continued to pay the mortgage during the marriage, that house may still be considered separate property in the event of a divorce.

What does it mean to commingle assets in marriage?

To commingle is to combine or mix separate assets with marital assets. You might commingle bank accounts, investments, or other property acquired or shared during a marriage

For example, if one spouse owned a home before the marriage but later added the other spouse's name to the property deed, the property has become commingled with marital assets. 

Similarly, if one spouse received an inheritance and used the funds to make joint purchases for the home, the inheritance may become commingled with marital funds.

Another example of commingling assets could be if one spouse invested their pre-marital money in a joint account and then continued to contribute to it during the marriage. The funds become commingled, which would make it difficult to determine which assets should be divided in the event of a divorce or separation.

Keep careful records and documentation of all separate assets. Avoid commingling them with marital assets if possible. If commingling occurs, speak with a legal professional to understand how to protect these assets in the event of a divorce or separation.

Why does commingling matter?

Commingling matters because, in the event of divorce, the court will divide marital assets and property equally between spouses. However, separate assets should not be included in this division of assets. 

If separate property has become commingled with marital property, it can be challenging to differentiate which property belongs to whom. This can lead to unnecessary disputes and litigation between spouses during divorce proceedings.

Prenuptial and postnuptial agreements

Protecting assets from commingling is why prenuptial and postnuptial agreements exist. These agreements can outline in advance what is to be considered separate property and can help protect assets from being commingled during the marriage.

If a couple is facing divorce, the agreements in a prenup or postnup can provide a clear and straightforward guideline for separating assets and avoiding unnecessary conflicts and disputes.

FAQ about commingled assets in divorce

What happens if an asset is commingled during a short marriage?

If an asset becomes commingled property in a short marriage, it may lose its status as separate property. 

In this case, the court may consider the contribution of each spouse toward the commingled asset and divide it accordingly. The duration of a marriage won't matter much for determining whether an asset is commingled.

Can the court disregard a prenuptial agreement if commingling occurs during the marriage?

If a prenuptial agreement exists, it will generally govern how assets are divided in a divorce. However, if commingling occurs during the marriage, it could complicate the division of assets. 

In these cases, the court may disregard certain clauses in the agreement. Or, it may consider the parties' behavior as evidence of their intentions. Ultimately, the court will make a determination based on the specific circumstances of the case.

Hello Divorce can help you navigate these complexities. We have many resources available to help you get through your divorce quickly and without breaking the bank.

Suggested: What to Do with Gifts from Your Ex-Spouse in Divorce