Dividing property in a divorce is often stressful. Determining who should receive what can be difficult from both emotional and logistic perspectives.
When couples divorce in California, most of their property falls into one of two categories: separate property and community or marital property. In some circumstances, telling the two apart is not entirely straightforward.
What is commingled property?
Commingling occurs when separate assets mix with community assets. Generally, this happens when couples place separate and marital assets in the same account or use separate assets to purchase community property.
Examples of commingled property
There are many situations in which separate property may become community property.
If you open a retirement account when you are single, those funds are your separate property. However, after you marry, your contributions qualify as marital property.
During your marriage, if you make a down payment on a house using money you earned while single, the down payment remains separate property. However, as you pay off the mortgage using community assets, your assets become commingled.
Joint bank accounts
Gifts and inheritances normally remain separate property, even if you acquire them while you are married. However, if you inherit money and deposit or invest it in a joint account, it becomes commingled with marital property.
Property that increases in value
Separate property may become marital property if you use community assets to increase its value. For example, an antique car that you purchased before marriage would be separate property. If you use marital assets to restore the car, increasing its value, you have commingled assets.
Untangling commingled assets can be challenging. When the lines between separate and community property are blurry, it might take extra time and negotiation to reach an agreement that is fair to both parties.