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Commingled assets can complicate property division

On Behalf of | Jul 14, 2022 | Divorce, Property Division

Just as every marriage is unique, so too is every divorce. There will always be property that must divided, regardless of the divorce, but the difficulty of that process can vary a lot from one divorce to the next. Couples with a high net worth may be particularly prone to complex property division, but it can occur in any divorce where property is commingled.

Marital and separate property

The basic rules of property division in California are straightforward. Any property which is owned entirely by one spouse is considered separate property and will remain with the spouse who owns it. All other income, assets and liabilities are community property and divided equally between the spouses.

Commingled property

Let’s say a newly married couple decides to purchase a home. One spouse has an account of their own, which is not accessed by the other spouse. The account-owning spouse takes money from that account to make the down payment on the new home – since that money was separate property, so too is the down payment.

Over the subsequent years, money earned from both spouses is used to pay the mortgage. During this time, the home is building equity. That equity is a result of both the down payment (which was separate property) and the mortgage payments (which were community property) – the home is now commingled property.

So, who gets the house? How is it divided? Who owns how much of it? This is just one example of how commingling assets makes property division much more complicated. Commingling can occur with many different assets and in many ways. The answers to these questions will depend upon the specific circumstances of the commingling – speak to a professional who is experienced in California property division to learn how your assets will be distributed.