How Does Personal Property Become Commingled with Marital Property?

 Posted on September 29, 2022 in Division of Assets

Because couples are getting married later in life, divorce attorneys in Illinois have observed an increasing trend of divorcing spouses who own valuable personal property they acquired before their marriage. Unless a couple signed a clear and enforceable prenuptial agreement and was circumspect about keeping their personal and marital property separate throughout their marriage, it can be very difficult or impossible to separate personal and marital property in a divorce.

However, doing so is an important first step in the asset division process so each spouse can ensure they keep what is theirs in addition to securing their fair portion of the marital estate. To learn more about how marital and personal property can become commingled (combined) during a relationship, read on and then contact an Illinois divorce attorney for answers to your questions.

How Does Marital and Personal Property Become Commingled?

Once a marriage legally begins, everything of monetary value that either partner earns from employment is considered part of the marital estate. Any property that belonged to either spouse before the marriage, or that was inherited by or gifted to only one spouse during the marriage, remains the personal property of that spouse.

But cash money is fungible and can easily be transferred between accounts. Suppose a spouse owned a personal savings account of $50,000 before getting married. During the marriage, several financial emergencies happened during which the couples’ combined incomes were not enough to cover the need for cash. The spouse with the private savings account informally “loaned” money to the marital accounts to cover the couple’s emergency expenses, and over the years, these “loans” were not paid back. There is nothing to prove the existence of these loans except for a verbal agreement between the spouses.

When it comes time to divorce, the spouse who “loaned” this money may want to argue that it is their rightful property and that they should be awarded its equivalent value out of the marital estate, prior to any other asset division considerations. The other spouse may claim that, despite having come from a personal account, the money was intended as a gift for the marriage, the spouse showed no serious interest in getting it back before now, and that the money has become commingled.

Another example of commingling going in the other direction is when a spouse owns a home prior to getting married. Assume both spouses live in the house and have even signed a prenuptial agreement stating that the non-owner partner will never own a share of the home’s value simply by residing there for any length of time. During the marriage, however, both spouses’ incomes are used to make major improvements, repairs, and upgrades, significantly increasing the value of the home. This can make the question of ownership more complicated because the marital assets (the income) have become commingled with a personal asset (the house).

Contact a DuPage County Divorce Attorney for Help with Commingled Assets

If you have been married for a long time or have a complex asset portfolio, you may need to disentangle your personal assets from your marital assets before they can be divided in your divorce. For help with asset division and every other part of your divorce, including child support, alimony, and a parenting agreement for minor children, contact the experienced team of Naperville, IL divorce attorneys with Calabrese Associates, P.C.. We offer confidential, comprehensive consultations so you can learn more about how we can help. Call 630-393-3111 today.

Source:

https://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt%2E+V&ActID=2086&ChapterID=59&SeqStart=6200000&SeqEnd=8675000