There are typically three types of issues that spouses need to address when they divorce. The first is the division of parental rights and responsibilities if the spouses have children together. The second is financial support for either children or a dependent spouse.
Finally, spouses typically have to negotiate terms for the division of their property. Georgia is an equitable distribution state. When married couples divorce, they either reach their own asset division settlement or litigate. The choices that spouses make during marriage and in the early stages of divorce can have major implications for the outcome of the divorce process.
In some cases, one spouse may assert that the other engaged in commingling, which could alter the distribution of their property when they divorce.
What is commingling?
Commingling is the process of blurring the line between separate property and marital property. Typically, divorcing spouses can preserve their separate property without including it in the asset distribution process. They can simply retain those assets without factoring them into other major decisions.
However, either spouse can make a mistake during the marriage that can complicate property division later. Commingling often involves adding a spouse to a financial account as a co-owner. Depositing money earned before marriage, received as a gift or inherited from a loved one into a joint account could also lead to allegations of commingling separate property with marital property.
Using marital income or assets to preserve and improve separate property can also constitute commingling. Allowing a spouse to provide unpaid services to maintain or improve separate property could also lead to claims of commingling if one spouse owns a business or real property.
What is the effect of commingling?
Commingling separate property with marital assets transmutes separate property into marital property. The spouse who originally owned separate property may not be able to maintain it as separate in a case involving claims of commingling. Their spouse could potentially assert that they have an ownership interest in those assets.
Even if the spouse who did not initially have an interest in the property does not want to outright retain it, they can still ask the courts to consider the value of the commingled property when making decisions about other marital resources. Commingling can lead to more conflict surrounding property division negotiations.
It can diminish how much property one spouse retains and alter the final distribution of resources after the divorce. Allegations of commingling can drastically impact the outcome of litigated property division matters.
Spouses who understand what constitutes commingling and the rules that govern property distribution may be able to prepare more effectively for divorce negotiations or litigation. Identifying separate property and warning signs of commingling can help people prepare for the upcoming property division process.
