Commingled property in a high-asset divorce
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Commingled property in a high-asset divorce

On Behalf of | Mar 28, 2022 | divorce

Property division can be one of the more complex issues to tackle in any divorce and this is particularly true for couples with a high net worth. The assets they hold will tend to be both more varied and more complicated than those of other divorcing couples. When those assets become mixed, it can be difficult to predict how property distribution will occur.

Property division basics

Since Pennsylvania is an equitable distribution state, a court will begin the divorce proceeding by classifying all of the couple’s assets as either separate property or marital property. Separate property is that which is owned by one spouse entirely and will likely remain with them following the divorce. All other assets are marital property and will be divided between the spouses in an equitable manner.

What is commingled property?

Commingled property occurs when an asset which is considered separate property is mixed with a marital asset. Let’s say one spouse received an inheritance during the marriage – inheritances are generally considered separate property. But if the spouse deposits the inheritance into an account which also includes marital funds, the two are now commingled.

Another example would be if a spouse owns their own home prior to the marriage, but they sell that home and use the proceeds for the down payment on a marital home. The proceeds may be separate property but the value of the marital home is not – the two have been commingled.

The court handling the divorce has many options as to how it handles commingled property and much will depend on the extent of the mixing and how long the assets were mixed. The longer the commingling goes on, the harder it becomes to differentiate a previously separate asset from the marital asset with which it was mixed. If you have concerns about commingled property and how it will impact the property division of your divorce, speak to a knowledgeable professional who is experienced in Pennsylvania divorce law.



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