When couples are going through a divorce and splitting up their marital assets, they may still have separate assets from before the marriage. For instance, a husband may have saved up $100,000 before he even married his wife, and he considers this his personal fund. He doesn’t want to have to split it up, giving his wife $50,000 in the divorce.
In many cases, this hypothetical husband would be correct. If he brought that money to the marriage, it is initially a separate asset. It’s important to carefully consider how he used that money after the marriage, though, or where he stored the money. In some cases, it can become commingled, which means that it has been mixed together with other marital assets. If this happens, a separate asset can become a marital asset.
How could this occur?
Let’s look at two examples of how this could take place. First off, say that the husband invested the $100,000 in the couple’s shared investment portfolio. They both had access to it and they were both benefiting as that investment portfolio generated more marital wealth. This could mean that the initial money that seeded the portfolio is also a marital asset and both people now own it.
Another example could be if the couple used the money to purchase a major asset. Maybe they spent the money when buying a house. They are now planning to sell the house and split up the earnings as part of the property division. But the husband likely cannot claim that he should get his $100,000 back. By putting it into the home that he owned with his wife, he turned it into a marital asset.
These examples help to show some of the complications of property division and why it’s so important to understand your legal options.
