Commingled property can complicate a divorce

Going through a divorce can be a very confusing time. In addition to the emotional toll it can take, you’ll have to deal with many issues you’ve likely never considered. Property division is one of those issues and, depending upon the circumstances, it can be hard to understand what will happen and why.

Property division basics

California is a community property state, which means it has unique rules that govern how property is divided during a divorce. At the outset of divorce proceedings, the family court will seek to classify all of the couple’s property as either separate property or community property. Separate property is that property which was owned only by one spouse – it will remain with that spouse following the divorce. All other property is community property and, generally, will divided equally between the spouses.

What is commingled property?

Commingled property is where things get particularly complicated, since these are assets which are both separate property and community property. Imagine one spouse owned a home prior to the marriage – this would be considered separate property. But what if the spouse sold that home and then used the proceeds to make the down payment on a new, marital home?

The marital home itself is considered community property and both spouses have an equal right to it. However, the money used for the down payment was separate property and will likely remain so. As such, the interests of both spouses in the marital home would not be equal, as it is not completely community property. Virtually any asset can become commingled like this or in many other ways. Speak to a professional who is experienced in property division issues to get a clear idea how your assets will be handled in a divorce.