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What is a commingling of assets and how does it impact my New Jersey divorce?

On Behalf of | Dec 7, 2020 | Divorce |

It’s increasingly common for each half of a couple to have their own income and assets when they marry. Quite often, each person assumes that they have an exclusive right to whatever they brought into the marriage if they ever split up again. The commingling of assets, however, can affect their ability to keep those assets after a divorce.

What does it mean when money is “commingled”?

New Jersey law sees any funds or assets, including monetary gifts, revenue and earnings, that you bring into a marriage or keep a separate bank account from your spouse’s as yours alone.

If those funds or assets become mixed with funds of assets that belong to your spouse, however, they are considered commingled. Ownership becomes less clear, and what you held as separate assets can convert to marital assets when this happens. New Jersey law also sees any instances in which you use personal funds to pay for household expenses as commingling. 

What impact does commingling have on your divorce settlement?

Most spouses can keep any separate property that they brought into their marriage provided that they never commingled it with their husband or wife’s assets. Once the funds have been commingled, they must be divided according to New Jersey’s laws regarding marital property if the couple later divorce. The court generally aims for a split that is equitable, however, rather than equal.

Can you avoid commingling your assets with your spouse’s assets?

One of the best ways to avoid commingling assets (aside from signing a prenuptial agreement) is to set up a joint bank account with your spouse soon after your marriage. Each of you can make regular contributions to that account to cover your ordinary household expenses such as utility bills, mortgage and car insurance payments. 

Meanwhile, you should keep any separate property that you brought into your marriage titled in your name alone. Expenses and income related to that property should all be managed from accounts that you keep separate from your spouse, as well. You should also avoid listing your spouse as an authorized user on your credit cards, investment accounts or titles at all costs if you want to avoid commingling assets.

Sorting out which assets are separate or marital ones in a divorce isn’t always easy. An attorney here in Clark can review your prenup and other documents to gain some perspective on your financial situation and how your divorce will go.

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