The issue of what is separate property and what is marital property could be a contentious issue in your divorce. Separate property is not divisible in divorce while marital property is. Problems arise if you take separate property and commingle it with marital property. When you do so, your separate property becomes marital property as well.
Kiplinger points out that there are a number of ways someone can commingle assets. These are important to know since you might commingle your property without even realizing it.
Mortgages and repairs
You may have purchased your own home before your marriage but have not fully paid it off by the time you tie the knot. Your spouse may have an income and wants to help you pay off the home. But in doing so, your spouse will own a share of the home if you divorce. This may also happen if your spouse contributes money to maintaining, repairing or renovating the residence.
Money accounts
People can have similar issues with commingling when it comes to their bank accounts. Say you have your own savings account and your spouse wishes to deposit money into it. This could cause trouble since you will have to figure out how much of the money in the account is actually yours if you divorce. Similarly, you could have commingling issues if you invest your spouse’s money in your retirement account or other investments.
Assets as gifts
The money you receive as a gift from parents or as an inheritance should be yours without a problem. But if you commingle that money with marital expenses, things can change. You might buy a second home that is in your name and your spouse’s. This could make the property a marital asset. You could also have problems if you invest your gift money with a marital account.
These are just a few examples of commingling. If your marriage has lasted for a long time, the issue of what is separate and marital property can become more complicated. You might avoid a contentious debate over the nature of your assets with a solid prenuptial or postnuptial agreement.
