Asset division can be one of the most time-consuming processes during divorce. Commingled assets are often an added challenge for Alabama couples with lots of assets or who have been married for a significant period of time. Since securing one’s financial future after divorce is typically a priority, divorcing couples must be prepared to address the issue of commingled assets.
What are commingled assets?
People typically expect to deal with two types of property during asset division — separate and marital. Marital property are assets that are owned jointly by both spouses, and typically most — although not everything — acquired after the beginning of the marriage. Houses, vehicles and retirement accounts are generally considered marital property. Separate property is whatever someone personally owns, such as assets:
- Assets acquired before marriage
- Personal gifts
Commingled assets are those that started out as separate property, but were then used in a way that might be considered marital property. Take for example an inheritance that was bequeathed specifically to one spouse. If that spouse deposited the funds in a personal account and used them for personal reasons, it would still be considered separate. However, commingling the funds would look like depositing the inheritance into a joint account and using the money for marital purposes, such as home repairs or paying off joint bills.
Problems arise when someone tries to assert that commingled assets are still his or her separate property. The other spouse could assert that because of how these assets were used they should be considered marital property, and therefore subject to property division. Alabama couples who are concerned that commingled assets might be a large problem during their divorce are often well advised to seek out guidance from a knowledgeable attorney.