Commingled property typically refers to property belonging to both spouses as opposed to separate property, which belongs to only one spouse. There are several common ways property becomes commingled in the event of marriage. One of the most common examples is that one spouse already has a property with a mortgage before marrying and then once married the property becomes commingled. Another common example is if one spouse owns a property before marriage, but the other spouse puts money towards the maintenance, upkeep, or repairs of the house during the marriage. Every marriage is different, but the commingled property is something bound to happen in some capacity in most marriages.
What Counts as Property?
It is important to note that property means property in the sense of real estate property, but also other assets. If one spouse comes into the marriage with a savings account and the other spouse makes contributions to it throughout the marriage, those funds are now considered commingled in a divorce. Even combining separate bank accounts into a joint account would be deemed a marital asset. If a couple purchases a new car and both spouses pay the payments, it will become commingled property even though it is only in one spouse’s name.
What Happens to Commingled Property in a Divorce?
When a couple divorces, they may be able to divide things up with just the mediation of a lawyer. However, this is a rare occurrence. Most couples end up fighting it out in court. In most states, the typical course of action when dealing with commingled property is called equitable distribution. This means a court of law will attempt to divide the commingled property equitably, which may not always mean equally. Depending on the state, the judge, and the specifics of the situation, equitable distribution may leave one party of the marriage feeling like they were shortchanged in the deal. When going through a divorce where property (both real estate and additional assets) are considered commingled, it is a good idea to seek legal counsel either from a trusted divorce attorney or a property and asset division lawyer.
Is it Possible to Avoid Commingling Property?
There are a few ways to avoid the issue of comingled property in a marriage. The first way is to avoid combining finances or accounts at any point. This means each spouse will keep their finances in separate accounts and never operate a joint account, but this may not be sustainable for some couples as the finances of the household become blurred over the years.
The second and more reliable option is the use of either a prenuptial or postnuptial agreement. A prenuptial agreement is made prior to marriage and is the easiest way to keep separate assets separate in the event of a divorce. A postnuptial agreement is made after the couple is already married, but still allows for the same principle regarding separate property to stay separate. These agreements also allow for couples to go through a divorce with a clearer understanding of how other elements, such as savings and debt, will be handled in a divorce to make the process smoother. Contact our law firm today at (310) 271-7675 for more information on how we can help.