Family Law

Commingling and Tracing Assets and Money in Divorce

Learn more about dividing assets during a divorce.
Updated: Feb 12th, 2019

Dividing Assets in a Divorce

A married couple’s assets and property are generally divided into two categories: marital (also referred to as joint or community depending on where you live) or separate property.

Marital property is property and income acquired during the marriage by either spouse. Specifically, any earnings, retirement contributions, homes, or cars that are purchased or earned during the marriage by either spouse are all examples of marital property that will be subject to division in a divorce. Marital property is divided equally (50/50) or equitably (fairly) depending on your state’s rules and whether you live in a community property or equitable division state.

Generally speaking, separate property includes all property that was owned or acquired by either spouse before the marriage. Certain types of property acquired during a couple’s marriage may also be considered separate property including gifts or inheritances. In a divorce, separate property is generally awarded to the spouse who owns it. However, when spouses commingle separate property, it can lose its separate status.

How Does Property Become Commingled?

Commingling is when one spouse’s separate property is mixed with the other spouse’s marital property. Commingling can happen when a spouse uses marital funds to improve, maintain, or contribute to separate property. For example, a house that you individually purchased before your marriage is your separate property. If you get married after you've bought your home, and later use marital funds to pay the mortgage, remodel, or make other improvements—like a new roof or paint—your spouse will gain an interest in the value of the home. Because the house has been commingled with marital assets, it may be treated as marital property—not separate property—during a divorce: this will depend on the laws in your state.

How Will a Court Trace Assets?

Even when property is commingled, you might be able to claim that some of it is separate. The only way to do that is by tracing your assets. For example, if you and your spouse share a bank account that was your sole account prior to your marriage, you can use account statements to prove or “trace” how much of the funds should be considered your separate property. If you have a house that has become commingled, you may need to provide purchase records, mortgage statements, and bank account records to show how much you contributed before the marriage.

Can I Prevent My Separate Property From Being Commingled?

The simplest way to prevent commingling is through a prenuptial agreement. A prenup delineates who gets what in the event of divorce. Most prenuptial agreements are upheld, regardless of whether spouses commingled their property.

If you didn’t plan ahead with a prenuptial agreement, you can still take proactive steps to protect your separate property during a marriage. Specifically, don’t use marital funds to pay off debts or a home mortgage. It’s also helpful to discuss major purchases like cars with your spouse and, decide if it’s going to be separate or marital property. If you want to purchase a car as your separate property, then you should use a separate bank account or personal funds for the purchase. You could also keep a copy of the check to show that the purchase funds came from your separate account.

Questions for Your Attorney

  • How can a prenuptial or postnuptial agreement protect my separate property?
  • Should I change my joint bank account into a separate bank account if I’m planning to get divorced?
  • My soon-to-be ex has all of our bank accounts and records. How do I prove that money I deposited into a joint checking account is my separate property?

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