What is Commingled Property in a Divorce?

If you are planning to get divorced in Chicago, you should learn more about how the process of property division will work. Under the Illinois Marriage and Dissolution of Marriage Act (IMDMA), all marital property will be subject to division while all separate (or nonmarital) property will not be divided as part of the divorce. When both spouses can reach an agreement about how marital property will be divided, they are permitted to enter into an agreement to distribute the property based on that agreement as long as it is not unconscionable. If the parties do not reach an agreement about the division of marital property, the court will divide it according to the terms of “equitable distribution.” In other words, the property will be divided in a manner that is fair to the parties.

Yet complications can arise in property division for a variety of reasons, including when marital and separate property has been commingled. We will give you more information about commingled property and how it is typically handled in a divorce case.

Understanding Commingled Property

Property is said to be commingled when it has characteristics of both marital and separate property. Commingled property is anything that is a mix of marital and separate property. Typically, marital property is any property acquired after the date of marriage, unless it is specifically excluded from this classification through a premarital agreement, or because it falls into one of the following categories:

• Inherited by only one spouse;
• A gift to only one spouse; or
• Acquired by one spouse through the use of separate property.

Courts will handle commingled property in different ways depending on whether it is possible to trace out the separate property from the marital property. Sometimes it is easy to say that $10,000 in an account identified as marital property. In other situations, however, it is much more difficult to sort out the separate property from the marital property. In some of those situations, the property simply will be classified as marital property and will be subject to distribution.

Ways Property can Become Commingled

Separate property and marital property can become commingled in many different ways. Some examples of ways in which property can become commingled include but are not limited to the following: 

• Separate bank accounts are combined into a single bank account;
• Separate property is refinanced during the marriage, and both spouses’ credit information is taken into account in the refinancing process;
• Separate property increases in value during the marriage because of actions taken during the marriage;
• Separate property is used to purchase marital property, such as a home or other real estate; and/or
• Separate property is retitled to include the names of both spouses.

There are other ways that property can become commingled. It is important to discuss your case with a Chicago divorce attorney if you have questions or concerns. 

Contact a Chicago Property Division Lawyer

If you have questions about property division in your divorce or need assistance managing commingled property, an experienced Chicago property division attorney can help. Contact Arami Law, Inc. today for more information.