Does separate property become marital property when comingled?

On Behalf of | May 26, 2021 | Property Division

Before people marry each other they have a life. They have jobs, earn income, have bank accounts, start retirement accounts, purchase homes and other real estate. When they get married they may get rid of some of their personal belongings, but they will generally keep the valuable assets and property that they acquired. They will also generally use those assets during the marriage or put money into accounts that both spouses use and put additional money into the accounts during the marriage.

This is known as comingling separate property with marital property. This is not a big issue or one that either spouse may think about during the marriage, but if they ever divorce, comingling can cause issues as they divide their property. The presumption is that the separate property that is comingled with marital property becomes marital property that will need to be divided. However, if the spouse can trace their separate property through the accounts, it can still remain separate property.

Methods used to trace separate property in marital accounts

The first step people wanting to keep separate assets separate is to know the amount of separate property that was originally deposited into the account. As long as they can prove the exact amount it can remain separate. However, it can become complicated when married couples use an account with comingled money to purchase various things.

There are different approaches that could be used. One is that marital property comes out first. So, the item purchased would be considered marital until marital money in the account is exhausted. This is the most common method of accounting. Sometimes separate property can be counted first though based on the circumstances. Couples could also use a pro rata approach. Another method is that the household expenses and bills will use marital money and not separate property so any money spent from the account on those items will not affect the separate property. Courts may also try to determine the intent of the parties.

It is not uncommon for couples in Texas to comingle separate and marital property during a marriage. During a divorce though this can create complications and consulting with experienced attorneys could be beneficial.