Individuals preparing for divorce have many challenging tasks ahead of them. Finding agreeable ways to divide property and financial responsibilities can be one of the most difficult elements of divorce.
Spouses may struggle to compromise on property division matters and may find it difficult to reach an agreement. If they cannot set their own terms through cooperation, then they need to prepare for the litigation in family court.
During either negotiations or litigation, claims of commingling could have a major impact on the outcome of the property division process.
What is commingling?
Most people enter marriage with at least some separate property. They may already own a vehicle or furniture. Some people have more valuable resources, such as real estate or small businesses. Commingling involves blurring the line between separate property and marital property.
Commingling could involve depositing separate financial resources into a shared bank account. It could entail adding a spouse to ownership documents. Using marital income or resources to maintain or improve separate property could lead to claims of commingling.
Allowing a spouse to provide uncompensated labor to maintain or improve separate property could also trigger allegations of commingling. When one spouse doesn’t take steps to properly protect their separate property, they may face a more challenging divorce.
What issues does commingling cause?
The first issue that results from commingling is often a dispute about what assets are separate and which ones are marital. Spouses need to go over financial records thoroughly to prove that commingling occurred or to counter claims made by a spouse.
Once spouses have agreed on what commingling may have occurred, they then have to address those commingled assets as they attempt to negotiate a property division settlement. That process may require professional asset valuation and the proposal of creative solutions.
Spouses may need to arrange to sell certain assets. The spouse who owns commingled property may need to make concessions regarding what marital property they retain or what marital debts they assume responsibility for after the divorce.
In cases where people entered their marriage with valuable property or inherited resources during the marriage, claims of commingling can be a significant concern during a divorce. Reviewing financial records with a skilled legal team can help people prepare for complex property division proceedings and lay the foundation for financial stability after divorce.
