In a California divorce, property division is concentrated on “marital property.” These are assets that both spouses share. It can include savings, physical property, or even debt. When courts divide assets in California, they use a “community property” model. In this system, the state attempts to give each spouse 50% of the overall assets.
This division can get complicated. There could be several bank accounts, various business interests, multiple homes, etc. Even so, the end goal is simple: Each partner gets half the value of everything.
Property division gets vastly more complicated when assets become “commingled.” This is property that exists a vague status, somewhere between marital property and separate property.
In this article, we will discuss marital property, and we will explain how personal property can become commingled. Then, we will suggest ways you can claim entitlement to your commingled property.
Marriage partners, in the eyes of the law, are family members. As such, they are expected to share everything. All money and property acquired during the marriage are owned by both parties, making it marital property. It doesn’t matter who paid for it, and it doesn’t matter who uses it more often. As long as it was purchased during the marriage, and as long as the couple is still together, that asset is marital property.
Separate property is owned by an individual. Standards vary, and definitions can become granular, but essentially, separate property falls into three separate categories. Anything you owned before the marriage can be claimed as yours alone. If you received a gift from someone outside the marriage, you are its sole owner. Finally, anything you inherit through a will or trust belongs only to you.
Commingled property falls into an imprecise, hard-to-define category. Essentially, it starts as separate property. During the marriage, however, your spouse could make contributions to the property, giving them some legitimate claim of ownership.
Here are some examples of how separate property can become commingled.
If you are an artist or inventor, you are likely aware of IP, or intellectual property. This is a creative idea that you developed. You can license it out, making money off of it even if you had nothing to do with the product for which your IP was licensed.
If you worked on this creation alone, you may have sole ownership of it, especially if you began working on it before your marriage. When your spouse makes any contribution at all, however, they can claim partial ownership. This contribution could be as small as coming up with a name for your product, or it could be as big as helping you with the design or story associated with your idea.
Whether inherited property becomes commingled is highly dependent on the property itself. For instance, if you receive jewelry from your great aunt, it’s unlikely that your spouse could claim that asset.
If, however, you inherit real estate, your spouse could put work into it. Perhaps they oversee the building of a house on the property, or they contribute to fixing up an existing residence. This could entitle them to partial ownership of that property, causing it to become commingled.
Say you were a homeowner before you got married. After the wedding, your spouse moves into your house. This becomes a tricky situation if you get divorced, as there are many ways the property could become commingled.
The first and simplest way this could happen is the length of the marriage. If you were married for a long time, staying in the same house throughout the marriage, this could entitle your spouse to claim the house as marital property. After all, they haven’t lived anywhere else for some time, and their entire life is centered around this residence.
Even when the marriage is brief, your spouse could contribute to the home, making it commingled property. Perhaps they stay at home with the kids. They manage the house, keeping it clean and initiating all repairs and remodels. This, too, could give them at least partial ownership.
Preserving Your Separate Property
This is no one-size-fits-all rule that defines how assets become commingled. Essentially, it all comes down to who has the best argument before the court. With a strong enough strategy, a spouse could claim that virtually any property has become commingled.
For this reason and many more, you need a skilled lawyer by your side. Your arguments for separate property need to be strong, and your attorney can help.
One of your best strategies is proving that your spouse did not contribute to the property in question. They did not invest money; they didn’t work to improve the item or increase its value; they didn’t contribute ideas (in the case of IP); etc.
Even better, you can prove that your spouse actively hindered or devalued the property. They trashed the home; they made it difficult to finish your creative project; they mishandled the property, causing its value to decrease; etc.
If you’re concerned about losing your separate property in a divorce, reach out today for a free consultation. We may be able to offer you guidance for preserving your assets. Call us today at (916) 299-3936, or contact us online.