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What is commingling and how might it impact your divorce?

Property division can be one of the most contentious aspects of divorce. This process can become even more stressful if property division impacts property that you thought was solely yours. How might separate property become marital property?

Which of your possessions are separate property?

When you divorce, the court will not divide all of your possessions between you and your spouse. Some property — called “separate property” — is not subject to division. Generally, this includes:

  • An inheritance left to only one spouse
  • Gifts given to only one spouse
  • Compensation from personal injury lawsuits
  • Possessions acquired before the marriage
  • Possessions identified as separate in a prenuptial or postnuptial agreement

Generally, other assets and debt acquired during the marriage fall into the category of “marital property,” and both parties have a claim to those assets. This includes any income earned during the marriage, even if you deposit those assets in a separate bank account or a retirement account with only your name on it.

What if those possessions do not stay separate?

Unfortunately, even if your possessions begin as separate property, they can become marital property through a process called commingling. Commingling occurs when separate property and marital property blend together and become difficult to divide.

For example, depositing an inheritance into a joint account would mix that inheritance with your jointly-owned funds. As another example, if you did not clearly separate your finances from the finances of your businesses, your spouse may have a claim to stake in that business in divorce.

While commingling can make property division a challenge, it is possible to protect your finances during this process. Legal and financial guidance can offer insight into your options and help you build a strategy that supports your goals.

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