When divorce becomes a reality, many couples look back on certain financial decisions with regret. A complicated aspect of the divorce process is the division of assets and debts. Numerous decisions which may have seemed logical at the time can ultimately lead to extra steps through this process. Commingled assets are a common example of this.
In a general sense, commingled assets are non-marital assets that were combined or intermingled with a marital asset. Essentially, when one party puts a separate asset together with a shared asset, the assets become commingled. The most common example of this is a cash inheritance. If one spouse receives a sum of cash as an inheritance from a deceased family member, this is considered a separate, non-marital asset.
However, if the spouse then deposits that lump sum of cash into the married couple’s shared bank account, it is considered a commingled asset and the other spouse is entitled to half of the asset.
While every situation is different, this is the essence of a commingled asset. The examples can become even more complex. If one party brings a house into the marriage as separate property and then sells the home, how the proceeds are used can raise numerous questions if the couple decides to divorce. Were the profits deposited into a joint savings account? Were the profits used to purchase a new home in both party’s names? Nearly every financial decision made during a marriage can directly impact how the divorce process proceeds.
As Colorado is an equitable division state, it is wise to fully understand how the division of assets and debts will work in your divorce. Do not hesitate to seek legal guidance in your unique matter.