Family Law Attorney Focusing on High Asset Divorce Service in Houston, Texas

How Divorce Affects Property Purchased with Commingled Funds

Commingling of funds during a marriage occurs when spouses mix together money or property belonging to each individual spouse. This occurs commonly with a bank account, where each spouse may be depositing his or her own money, but the account itself is joint and the total sum does not differentiate who deposited what.

Texas is one of ten community property states. In these states, commingling money or assets carries with it the presumption that these items are marital property and thus subject to division during a divorce. If a spouse wants to prove that these shared assets are his or her separate property, the burden is on that spouse. In order to prevail and keep the court from dividing commingled property during a divorce, the spouse must be able to trace the assets origin. For help in unraveling commingled property during a divorce, a Houston property division lawyer is available.

Proving that Commingled Assets are Separate Property

Tracing the origins of community property depends on factors like the extent of commingling and the complexity of the transaction. For example, if the couple commingled only a small portion of marital property with a large amount of separate property belonging only to one particular spouse such as an inheritance, the court is more likely to determine that the property is separate and not marital.

The following are several more examples of when commingling might occur in a marriage:

  • A spouse deposits a gift that he or she receives into a joint account
  • Home purchases–when spouses pool together assets from a number of sources, including inheritance or separate savings, to make a large payment
  • One spouse begins an investment account with his or her own separate funds, but, as time passes, the couple makes joint, commingled contributions to the account

Proving to a court what portion of commingled property is separate property can be more difficult without detailed records. Acts that a spouse can take to ensure that a court treats commingled property as separate property include the following:

  • A couple can specifically agree that certain transactions or assets are separate property and put that agreement in writing.

Before making the expenditure, you can consult with an attorney to make certain that the separate property which is placed in a joint account will meet the legal requirements for tracing in Texas.

The best thing you can do is not to commingle. Remember in Texas the burden is on the person claiming separate property to trace it by clear and convincing evidence. Furthermore, in Texas the Judge gets to determine the weight and credibility of a witness testimony. You may testify that a record supports your separate property claim and a Judge can simply say “I do not believe it or while I find the testimony credible I do not think that it proves by clear and convincing evidence that the property is separate, so therefore, I am going to divide it as community property”.

  • A spouse should keep a log of deposits into commingled funds and the origin of those deposits. If a spouse makes payments towards a marital purchase using commingled funds, he or she should specify whether the payments are from separate property or marital property.
  • Spouses who want to ensure that commingled property remains separate should be consistent in their use of the commingled property. They should use their portion of the commingled property for their own needs.

Tracing assets from commingled, marital funds can be one of the most difficult aspects of a divorce. Improper division can result in your not receiving a fair share of property. For assistance on making sure that a court properly divides your property during a divorce, contact a Houston property division attorney at John K. Grubb & Associates, PC.

By | 2017-04-07T11:51:56-05:00 January 26th, 2012|Asset Tracing and Separate Property, Newsletter|Comments Off on How Divorce Affects Property Purchased with Commingled Funds