When going through a divorce, part of the process requires you to determine what is considered separate property and what is marital property. So, what happens when your separate property gets mixed up in your marital property? Now, that property is what is called commingled property. An example of this would be if you owned a home before getting married, got married, and then you and your spouse decided to pay the mortgage on your house together as a unit. Your house has now become commingled property.
What Is Commingled Property?
Commingled property is separate property that has been combined with community property. So, what happens if separate property gets commingled with the marital estate? The answer depends on how commingled those assets are. If they cannot be separated, those assets will be considered marital property and divided in that manner.
Commingled Property and Divorce
Commingled property does impact a divorce and can draw out the divorce process. The reason for this is that it is already difficult to divide assets and property. Commingled property adds an additional layer of complexity to the process.
When a couple divorces, Texas law requires that they divide their property in a way that is defined as just and right. The court will look to a variety of factors to determine property division, including misconduct, each spouse’s earning potential, each spouse’s health, which spouse has custody of the children, as well as each spouse’s level of education and ability to find employment. What this means is if your commingled property is found to be marital or community property, then it will be subject to division according to these laws.
What Are Some Examples of Commingled Property and Assets?
To help with your understanding of commingled property and assets, here are some examples:
- You inherit money and deposit your inheritance into a joint bank account to share with your spouse
- You own a home and pay the rest of it off using marital funds
- You and your spouse combine funds to make a purchase such as a vacation home, boat, car, or additional property
- Your spouse contributes money to an investment account you own
- You and your spouse deposit money into one of your checking or savings accounts
How to Avoid Commingling Funds
It would be a good idea to keep track of your assets in the event of a divorce. This could save you money, stress, and time in the future. Here are some ways to avoid comingling funds while married:
- Keep separate bank accounts
- Set up a prenuptial agreement which clearly states which property is marital property and what will remain separate property
- Avoid using separate property to pay off marital debts
- Keep your name on the title of any property your own and only use your funds to make repairs, renovations, etc.
- Before making a large purchase, determine as a couple if you will use separate or marital funds
- Consult with an experienced family law attorney for additional support
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