Boutique Family Law Representation & Stellar Client Service

How commingling can impact property division in a divorce

On Behalf of | Jun 18, 2024 | Community Property Division

Spouses who have shared their lives for years or maybe even decades have to find a way to separate their daily lives and resources when they divorce. Property division can be a very challenging issue to address during divorce negotiations. California is a community property state, so each spouse has an interest in any assets and income accrued during the marriage.

One of the first steps in the property division process involves determining what is separate property that only belongs to one spouse and what is marital property that they have to divide in accordance with community property statutes. Separate property consists of assets owned prior to marriage, resources protected by marital agreements, inheritances and gifts received by one spouse. In some cases, commingling of separate property with marital property could make it even more challenging for people to divide their marital assets.

What is commingling?

When someone commingles assets, they combine two types of assets or they make ownership of a previously distinctly separate resource unclear. Commingling can make resources vulnerable to claims by the other spouse in a divorce.

Depositing money inherited from a parent’s estate into a joint account is a perfect example of commingling. The spouse who technically didn’t inherit the money could claim they deserve a portion of it because commingling made it marital property.

Giving someone access to or control over separate property can also constitute commingling. Adding a spouse as a joint account holder to an inherited investment account could constitute commingling. So could adding their name to the title of real estate.

Finally, co-mingling could involve using marital resources to maintain separate properties. Assets that people acquired through inheritance or prior to marriage could be at risk during a divorce if someone uses marital income to improve or maintain those assets.

For some people, proving that commingling occurred could lead to a better outcome during property division proceedings. Other times, someone’s divorce strategy may focus on disproving claims of commingling. Recognizing when seemingly small choices could drastically influence complex divorce proceedings can help concerned spouses prepare. Those who know what to expect during a divorce may have an easier time pushing for an appropriate property division outcome.