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Can comingled funds be unraveled through property division?

In today’s day and age, some people in California are waiting to marry so they can focus on building their career. Thus, spouses who marry later in life may have had the opportunity to obtain significant assets on their own before they walk down the aisle. For example, one spouse or the other may already own a house, have savings in a bank account or own a business.

Spouses in such situations may wish to keep the assets they bring into the marriage separate from the marital estate. And, in general, assets a person owns before getting married will remain separate property in the event of a divorce. This means that they will be retained by the spouse who owns them and will not be subjected to the property division process. However, it is possible for such assets to lose their separate nature if they comingle with marital assets.

For example, if one spouse owns a home before getting married, but both spouses contribute to the upkeep of the home or pay the mortgage using marital funds, that home may be considered marital property and thus will be subject to property division. Similarly, if one spouse has a separate bank account before getting married but afterwards places marital funds in that account or uses the account to pay for marital expenses or pay off marital debts, that account may be considered marital property.

When separate assets comingle with marital assets, it can affect the property division process. Since each spouse has a right to marital property, those who wish to keep specific assets separate can take certain steps to accomplish this goal. They may execute a prenuptial agreement prior to getting married. They should not use separate funds to pay for marital expenses or marital debts. Instead, they can keep their separate bank account in their name only and once married open a separate joint account to pay for marital expenses.

These are only some suggestions on how to stop separate assets from comingling with marital funds. In the end, property division is a complex topic and this post cannot replace the advice of an attorney. Since each person’s situation is different, those who have questions about the property division process or who are interested in executing a prenuptial agreement will want to seek professional guidance.

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Joseph R. Zoucha, Attorney & Counselor at Law
520 Warren Street
Redwood City, CA 94063

Phone: 650-381-9591
Fax: 650-261-9650
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