Issues When Dealing With Commingled Funds In A Divorce
Prior to getting married, the property owned by you is regarded by the court as your “separate property”. This dignified that such a property is owned only by you and not by your spouse. For example, if you have $15,000 in your bank account and own a property while getting married, you are bringing your separate property in the marriage. Such a property remains your separate property if it is not “commingled” with your spouse’s separate property brought into your married life. For instance, in case you get married and both of you stay in the same house that is owned by you prior to the marriage. However, if the incomes of both you and your spouse are being contributed toward paying the mortgage, such a house is automatically counted as a marital property. In other words, it becomes a property your spouse may be interested in,provided both of you decide to divorce in the future.
The job of splitting property as well as other marital assets could be a tough one and full of conflicts especially for those couples where there has been a commingling of funds in the course of the marriage.
While negotiations continue for divorce settlement, determining which property should go to whom while depend on the degree of the occurrence of commingling of funds during that marriage as well as the complexity of transactions like home or automobile purchases, a big and crucial role is played by commingled funds during a divorce.
In case you fail to keep a thorough accounting of what is being done with your assets and properties during your marriage, it is not easy to prove that the purchase of that property was not done with commingled funds. The following are some of the tips for all those spouses who do not want to commingle during their marriage.
Enter into a prenuptial agreement
It makes sense to have your prenuptial agreement in place, which will clearly state, which properties will be counted as marital properties and which will be not in the event of a divorce.
Avoid paying off marital debt using your separate property
You should not use your separate property for paying off any marital debt. For instance, if you receive a hefty amount of money from your parents as a gift, the money should be used towards paying off a credit card debt or your home debt. You need to note that when funds benefit a marriage, they become marital property.
You should have separate bank accounts
Funds should only be deposited in a joint account when you want to count it as marital funds. When you deposit funds in your separate and individual bank account, it is regarded as your separate property.
To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation.
Gerald A. Maggio is a trained Orange County divorce mediator who has amicably resolved cases many cases out of court, as well as an experienced divorce and family law attorney. Mr. Maggio founded California Divorce Mediators in 2012 with the belief that although “not every marriage can be saved, every family can” and a mission to save families from the financial and emotional distress associated with traditional divorce litigation. California Divorce Mediators is located in Irvine, California, and serves the Orange County area and other counties in California offering divorce mediation, child custody mediation and mediation of other family law matters.
