For some couples, the biggest questions they have during a divorce revolve around their children. They know that they need to split up parenting time and allocate decision-making power. They have to set up a schedule and determine how they can coparent moving forward. But for couples without children, their biggest divorce-related concerns may be financial. They need to disclose the assets that they own and determine how to divide those assets fairly. As a general rule, marital assets should to be divided and separate assets can be retained by their rightful owners.
An example of a separate asset is something that a person owned prior to their marriage. Maybe they already had a retirement plan or they had invested extensively. A marital asset is something that is acquired or earned during the marriage. This can include wages, bonuses and commissions, but it also includes major assets that spouses opt to purchase together, like a new car.
Changing the status of an asset
Commingling is the process of mixing assets together. For instance, if one person had an investment portfolio that was their own money, but they then mix it together with their new spouse’s investments, that portfolio has been commingled.
Comingling also frequently occurs when one person receives an inheritance, which is generally classified as a separate asset if/until they keep it in a shared account that is accessible by their spouse. Even if it was a separate asset initially, the status will likely change once it has been comingled. Once this occurs, each spouse will technically have a claim to some of its value in the event of divorce. So the way that assets are handled prior to a divorce is potentially very consequential.
What can you do?
The challenges associated with comingled assets can inspire some complicated financial questions during a divorce. What assets really need to be divided? Do they have to be split evenly? What if there is a disagreement about where an asset was stored or if it was commingled at all? Seeking legal guidance can help to clarify the answers to these consequential queries.
