Understanding Commingled Property in Divorce
During a divorce, one of the most challenging aspects can be dividing assets. Depending on where you live, there are various rules and guidelines that dictate how to legally divide property but that doesn’t mean there are no negotiations or gray areas involved. Dividing assets can lead to high tension, particularly when you are doing so in a courtroom with lawyers arguing and a judge making decisions. It is far less contentious and less costly to choose divorce mediation instead and work with your mediator to divide assets fairly. There are many terms involved that can be confusing and may leave you wondering what exactly will happen with your assets. One of these terms – commingled property – is an important term to understand because it will greatly impact asset division during your divorce.
Commingled property is separate property that a spouse has chosen to mix with community property. So, in Arizona, it is essentially viewed as “community property” which means you would divide commingled property equally. An example of this would be when a couple married and opens a joint bank account together into which they each add their own money. Regardless of whether or not they add equal amounts, their individual assets are now considered “commingled” and the total in the joint bank account is seen as community property.
Another example would be property and homes that may be seen as commingled. Dividing homes and property can already be a challenging aspect of divorce and when commingling is involved, it is even more complicated. Let’s say you own your home and your spouse is not on the title but you use marital funds to pay the mortgage, which could be considered commingling. There can be a very fine line between separate property and commingling and you may have commingled without even realizing it. If a prenuptial agreement is in place, it may cover commingling and outline what is to be done but if not, working with an experienced and knowledgeable divorce mediator is often the best way to fairly divide assets, differentiate between separate property and community property, and whether or not commingling has occurred and will affect asset division.