How is commingled property handled in a California divorce?

| Jun 2, 2021 | Property Division

Property division can be a contentious aspect of a California divorce. Although it does not reach the importance of child custody and child support, people often engage in extensive dispute with lingering bad feelings about who gets what property. In the state, there are three categories of property: marital property, separate property and commingled property. The first two are well-known. The third might be somewhat confusing. If a property cannot be categorized as marital or separate, it could be commingled. Understanding the details is imperative to reaching a satisfactory resolution as part of a divorce.

When might a property be commingled?

Commingled property is the result of combined community property and separate property. This is also referred to as “mixed.” Examples of commingled property are many. If a person owned a home at the time of the marriage and it was sold with the profits used to buy a marital home, then the down payment and anything else that was purchased with those proceeds will be separate property and belong to the person who sold the home they had before. However, once that money is gone and both sides are contributing to the home purchase and other expenses, then that is commingled. Equity stemming from that will need to be shared even though it started out as separate property.

The accumulation of value of any account, item or property that was owned by one before the marriage will be commingled from the time the couple was married. Since people might be under the impression that a property they owned beforehand was theirs and would be separate if they divorce, this could be an unexpected foundation for discord if they are unaware of commingling or unfamiliar with exactly what it means. This can be problematic with a pension that one person had before the marriage. Contributions to it after the marriage will be commingled.

Addressing property division and commingled assets may require guidance

Property division disputes are unfortunately common in divorce and this is especially true if the people have significant assets. Major assets are not necessary for the parties to disagree. It could be over any property that is commingled or in dispute. Of course, it is preferable if the sides are amicable and can negotiate effectively to move forward without rancor. It is wise to have guidance as to how to navigate this potentially complex situation. For advice, it may be useful to consult with those experienced in family law to determine how to move forward and reach an acceptable result.

 

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