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Commingling can change the status of assets in property division

When a couple in California marries, does the old adage, "What's yours is mine, and what's mine is yours," apply? Well, it is possible for some assets that were obtained prior to marriage to remain the sole property of the person who owned them even if they divorce. However, in order to keep separate assets separate, it is important that commingling has not occurred.

Commingling can turn what was once a separate asset into a marital asset. For example, let's say a party owns a home prior to getting married. However, once married, the mortgage on that home is paid using both parties' income. This may be considered commingling, and that home might be converted into marital property.

When a couple divorces, they will need to divide their marital property. However, when separate assets commingle with marital assets to the point where it is impossible to determine what is separate and what is marital, those assets may be deemed marital. For example, an inheritance is normally considered separate property. However, if the inheritance is placed in a joint bank account shared by both spouses, it might then be considered a marital asset. Also, if a couple combines their finances after marrying in order to purchase items such as a house, an automobile, electronics or any other property, those items might be considered marital property.

So, how can spouses avoid commingling property? One way is to state whose property is whose in a prenuptial or postnuptial agreement. A spouse should not pay marital debt using their own separate bank account. If a piece of separate property needs to be maintained, only the spouse who owns it should use their income to pay for the maintenance. Also, make sure to establish a paper trail showing who paid for what.

These are only some ways to avoid commingling. In the end, determining what assets are separate and what are marital in a divorce is not always clear. A family law attorney can assist their clients with the property division process, so that the end result is fair and appropriate.

Source: Live About, "Divorce and Commingled Funds," Cathy Meyer, Dec. 30, 2016

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