Carolann M. Aschoff, P.C.

Advance planning can avoid commingled funds in divorce

Some couples in New Jersey who file for divorce learn too late that they should have avoided commingling their funds during their marriage. In the event of a divorce, funds that were commingled will be part of the marital estate, and the court may order it divisible. However, if it was addressed in a prenuptial agreement, it might remain the property of the original owner.

Examples of funds that are frequently commingled include one spouse's inheritance that is deposited into a joint bank account. Also, if marital funds are used to pay the mortgage on a home that was the property of one spouse before the marriage, the home will no longer be separate property. The same applies to any property, cars, TVs, furniture or other items that are funded with combined resources.

If both spouses contribute to one investment account, or a joint savings or bank account, funds will be commingled and therefore marital property. Another confusing situation is one in which a couple borrowed money that was then used to benefit both parties. When they file for divorce, that debt will become a shared responsibility to be divided.

These are some examples of commingled funds that could be avoided by drafting a prenuptial or postnuptial agreement to specify the separate property. Also, when a divorcing couple avoids litigation and negotiates their own divorce settlement, they can decide how they want to handle property division, rather than having the court make a ruling about commingled funds. Each spouse can utilize the services of separate divorce attorneys to assist with the drafting of marital or separation agreements, and with negotiating a settlement agreement to present to the New jersey divorce court.

Source:, "Divorce and Commingled Funds", Cathy Meyer, Accessed on Feb. 8, 2018

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