When approaching a divorce, assets can be broadly categorized in two different ways. Some are marital assets, which both people own. Others are separate assets, which are owned by just one spouse.
This is an important distinction to make because separate assets typically do not need to go through property division. The spouse who owns the asset simply keeps it after the divorce. Marital assets, on the other hand, do have to be divided because both people can claim ownership of them.
Commingled assets, though, are assets that have been mixed together. This is important to consider because it can change their status from a separate asset to a marital asset.
2 examples
For instance, perhaps you bought a house before the marriage, so it was a separate asset, and you simply asked your new spouse to move in. But interest rates went down five years later, so the two of you refinanced the house together. This likely means that the home is now a marital asset, even though you bought it before you got married.
Another example is an inheritance. If your parents initially left the inheritance just to you, it is a separate asset as long as you keep it separate, such as storing it in a personal bank account. But if you use the money to pay shared debts, if you buy shared assets like a family home, or if you simply keep the inheritance in a joint account with other financial assets that you and your spouse both own, it can become a marital asset.
Dividing assets can be complex, especially when couples disagree on their status, so you must know what legal steps to take.