Placing your assets into categories is a critical early step when preparing for a divorce. Different states handle the division differently, but in all of them, property can be classified into two main categories. That which belongs to only one person is known as separate property. That which belongs to the couple is known as marital property in some states, including Ohio, while other states refer to it as community property.
Yet, there is a third category that can catch would-be divorcees by surprise – commingled property.
An asset that is commingled is one that cannot clearly be classified as either separate or marital. Typically, it started out as separate property, but the couple treated it in a similar way to how they treated their marital property, to the point that it is now very hard to distinguish which it is. Oftentimes, a court is left to make a decision on which way the decision will go. Each party may present their argument as to why they think the asset should be treated as separate or marital property.
How can this happen?
Take an inheritance given to one spouse, for example. This would typically be considered as their separate property. If, however, they placed the money in the joint account they hold with their spouse, used for everyday expenditure, it could be impossible to determine if some of it remains or if it was all spent.
Another example is if one spouse entered the marriage with a vehicle they had yet to complete the loan payments on. Money from the joint account was used to make the remaining payments. The spouse who took out the original car loan may claim the car is separate property as theirs. The other may claim it has become commingled, so it should be subject to division as a marital asset would.
If you are going through a divorce, it’s crucial to understand what category each major asset falls into. Experienced legal guidance can help.
