Commingled property: when divorce becomes complex

Commingled property: when divorce becomes complex

On Behalf of | Sep 29, 2021 | Divorce |

Working through the issues that come up in a divorce can be frustrating for any couple, even when they’re on good terms. Child custody, spousal support and property division have very specific legal terms and procedures that most people aren’t familiar with. And if you have property which has been commingled, things can get very complex, very quickly.

Sometimes property division is really, really hard

Since California is a community property state, dividing property during a divorce is often straightforward. If an asset was owned by one spouse prior to the marriage, it will likely be considered separate property and retained by that spouse. If the asset was acquired during the marriage, it is community property, owned by both spouses equally.

However, commingled property is when an asset has characteristics of both separate and community property. It is a common occurrence for those who marry later in life or are getting married for a second time. Fundamentally, commingled property occurs when the asset exists prior to the marriage and is owned by one spouse, but then after the marriage, at least some portion of the asset is used for the benefit of the marriage.

For example, one spouse may own a condominium prior to the marriage. But once married, the couple decides to purchase a single-family residence to live in. In order to make a down payment on the house, the spouse who owns the condo sells it and uses that money for the house. The couple then continues to pay the mortgage on the home throughout the marriage. The house is now commingled property.

Retirement accounts are another asset which can become commingled. Prior to the marriage, one or both spouses may have made contributions to their own pensions. But once married, both pensions become the property of the couple moving forward. They are considered separate property prior to the date of the marriage and community property after that date.

Assistance for a complex divorce

Because of the complexities surrounding commingled property, it is critical that you obtain the assistance of qualified and experienced professionals. It is an aspect of divorce and property division that is easy to get wrong and difficult to do correctly.