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How Does Commingled Property Affect Property Distribution?

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Property division can be one of the most complex matters in a divorce. To ensure that things are fair, the couple must identify what’s community and what’s separate property and the value of the assets. These can be tedious tasks on their own. Still, things could get even more complicated if the couple mixed their property during the marriage. Thus, what was once separate property now has pieces of community property in it. The couple must consider various factors and attend to the details to determine how to handle this commingled property. Often, a professional is required to help untangle the intricacies.

The lawyers at Claery & Hammond, LLP assist individuals in San Diego through complex divorce matters. Schedule a consultation with us by calling (310) 817-6904 or contacting us online today.

How Is Property Divided?

In a divorce in California, property and debts are divided between divorcing couples. Concerning asset division, the law defines property as either community property or separate property.

Community property is everything acquired during the marriage. Generally, it is divided equally between spouses. Separate property includes anything acquired before the marriage or through inheritance or gift during the marriage. These debts and assets may remain with the original owner after a divorce.

When dividing community property, state law requires that it be split according to what is “fair and just.” This includes considering salary and other financial considerations, although an equal division is typically enforced. In some cases, one party may receive more than 50% of the property if it can be justified by other factors. On the other hand, separate property is not usually divided, but depending on circumstances, one party could receive a portion of that property to reach an equitable outcome.

Is It Community or Separate Property?

As noted above, community property is anything earned or bought during the marriage. It also includes any debts either spouse took on while married, even if they are only in one spouse’s name.

Examples of community property include the following:

  • Cars,
  • Jewelry,
  • Furniture,
  • Retirement, and
  • Pensions.

Separate property can also include real or personal property, retirement accounts, and debts. However, what distinguishes it from community property is that it was earned or owned before the couple got married or acquired with only separate property.

Not all property is easily discernible as either community or separate. In some cases, certain assets can have portions of community and portions of separate. Often, this happens with real estate or retirement accounts.

To illustrate, suppose one spouse contributed to a retirement account before their marriage. After they got married, they continued to put money into it and maintained it following their separation from their spouse. The contributions made before the marriage and after separation are considered separate property. And those made during the marriage are considered community property.

How Is Commingled Property Divided?

Dividing commingled property can be difficult. It first needs to be split into community and separate property. Doing this requires a detailed review of the purchase or contribution records. This helps determine when parts of the asset were separate property and when parts became community property.

What can further complicate these matters is the date of separation. Separate property is not only that which was acquired before the marriage. It also includes things earned or owed after the couple was separated.

The spouses might have different interpretations of the separation date. One might claim it was when they moved out. The other might say it was the day they agreed to get a divorce. Depending on how far apart these incidents happened, the value of the community portion of commingled property can change substantially. For example, if one spouse says that they separated in June of 2022, they consider their contributions to their retirement after that date to be separate property. However, if the other says that they separated in January of 2023, they consider contributions made from June of 2022 to January of 2023 to be community property.

Getting Help from an Attorney

Commingled property can complicate a divorce and create even greater tensions. Having a family law lawyer assist in the case can relieve some of the stress. The attorney can help identify community and separate property to facilitate a fair outcome. They may also reach out to experts who can guide how commingled property should be handled.

To discuss your case with an experienced lawyer in San Diego, please contact Claery & Hammond, LLP at (310) 817-6904.


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