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What happens if you mix separate and marital property?

On Behalf of | Aug 17, 2023 | Property Division

Whether an asset is classified as marital or separate is crucial to the division process phase of divorce proceedings. Separate property remains untouched, while marital assets are divided equitably between the divorcing couple. But what happens if there is a mix-up of the two?

There is a legal term for such a scenario – commingled assets. It occurs when there is a blend of separate and marital funds or assets, making it challenging to discern the individual origins. Commingling can happen innocently, such as using marital funds to renovate a separately owned property or depositing your inheritance in a jointly held bank account.

Tracing the origin of commingled assets

Fortunately, under Ohio law, separate property that gets mixed with marital property retains its original identity. In other words, such property does not cross the divide and is not up for division during divorce.

Tracing can help discover the origin of the commingled assets and each party’s contribution to discern between marital and personal interests. Think of it like following the paper trail to assess the extent to which commingling has occurred. Forensic accountants and financial experts can help in such an endeavor.

However, it is not always possible due to the intricacies of tracing and distinguishing commingled assets. Factors such as incomplete records, evolving financial situations or legal constraints can hinder the process. If the separate property in a commingled asset is not traceable, it will be considered marital property and divided accordingly.

Avoid costly mistakes

Commingled assets can introduce an additional layer of complexity in the property division process, and you could lose out if you are not careful. Seeking legal guidance can help you overcome this and other bottlenecks that could harm your financial interests in a divorce.