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Tuesday 08, Aug, 2017

What Does it Mean to Commingle Property, and How Will It Affect Property Division in My Divorce?

Many married couples get divorced in Chicago, and each typically has to go through the process of property distribution. In long-term marriages, especially, a married couple can acquire substantial amounts of property, and it can be difficult to know how the court is likely to divide that property. While some spouses can come to an agreement about issues concerning property division, the distribution of marital assets can quickly lead to a contentious and contested divorce. The Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/) has procedures in place for the court to make decisions about property distribution, but this process can get very tricky when separate property has been commingled.

What does it mean to commingle property, and how can it affect the distribution of marital property in your divorce case?

Understanding the Distinction Between Separate Property and Marital Property

Under Illinois law, marital property is divided according to a theory of equitable distribution. This means that marital property—both assets and debts of the marriage—will be divided based on what is equitable, or fair, to both of the spouses. The statute provides many different factors for a court to consider when it is deciding what manner of property distribution would be equitable. As you might have noticed, we said that only marital property is divisible. This means that separate property is not subject to property distribution when you get divorced in Chicago.

There are many different types of separate property, or ways in which property can be classified as separate. Just a handful of examples include the following:

  • Savings from earnings prior to the marriage;
  • Stocks and other investments that one spouse made prior to the marriage;
  • Inheritances that are specifically for one spouse, and that are inherited either before or after the marriage;
  • Debts acquired prior to the marriage;
  • Furniture, artwork, automobiles, and other physical property acquired before the marriage occurred;
  • Gifts to one spouse before the marriage;
  • Gifts to one spouse during the marriage but specifically designated as a gift only for that spouse;
  • Property that has been identified as “separate” in a premarital agreement; and/or
  • Income, investments, or physical property acquired after the date of separation.

There are other types of separate property, as well, and your Chicago divorce lawyer can help you to understand how specific property is likely to be classified.

Commingling Property and the Complications of Property Division

This all might seem relatively cut and dry, but it can get very complicated when one of the spouses commingles separate property with marital property. Commingling refers to a situation in which separate property gets mixed in some way with marital property. When separate property is commingled with marital property, it can look more like marital property. As such, it can be confusing to sort out whether the property is divisible during divorce. There are numerous ways in which separate and marital property can be commingled. Some examples include:

  • Spouse begins depositing joint marital income (marital property) into a savings account she had before the marriage (previously separate property);
  • Spouse uses savings (separate property) to invest in marital home (marital property);
  • Spouse uses separate inheritance (separate property) to pay for new artwork for the marital home (marital property) that increases in value during the marriage; and/or
  • Spouse uses separate inheritance (separate property) to pay the startup costs for a small business that the couple runs together (marital property), which increases in value during the marriage.

Sometimes a court can trace out what amount of the commingled property is separate and what amount is marital property. However, the process can become increasingly complex when the property increases in value—such as if one spouse uses separate property to invest in marital property that becomes more valuable over the course of the marriage. How much of that increase in value is marital property and how much is separate property?

Discuss Your Case with a Chicago Divorce Attorney

As you can see, commingled property can be a complicated issue when it comes to property distribution. However, a Chicago divorce attorney can help. Contact Arami Law Office for more information about how we can assist you.

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