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Commingled property is property that was once one spouse’s separate or pre-marital property but is now combined with marital property. For more detailed information regarding the distinction between marital and separate or pre-marital property, see our articles entitled “Marital Property” and “Separate Property.”
For example, if a wife brought $15,000 worth of separate assets into the marriage and during the course of the marriage she added those funds to the couple’s joint bank account or used those assets to support an investment held jointly by the couple, that separate property is now commingled. Once separate property has been commingled with marital property, it is not likely that a judge will distinguish this property from the other marital property upon divorce. However, in certain situations, there may be a way for one spouse to claim commingled as separate funds upon divorce.
The main way one spouse may claim commingled funds as separate upon divorce is a process called “tracing.” This process involves following or tracking the separate funds by referring to detailed records like deposit and withdrawal slips, bank statements, and other account information, to show how much of the money is truly marital and how much money is actually separate property. This process is highly complex and most likely will require the assistance of an accountant or other financial expert to trace the funds and testify at trial if necessary.
Because Georgia is an equitable division state, when one spouse’s separate property is mixed with the property or the other spouse or the couple’s marital property, that separate property becomes relatively indistinguishable. Even if tracing is conducted, there is no guarantee that a court will ultimately make an award that reflects the tracing analysis or award the spouse who commingled his or her separate property the full value if the separate property. In order to ensure that your separate property indeed remains separate in the event of divorce, the best practice would be to maintain a separate account for any separate funds or keep any separate real or personal property titled exclusively in your name. Additionally, consider speaking with your future spouse about entering into a premarital agreement. Or, if you are already married, consider entering into a post-nuptial agreement.