Divorcing? 3 Ways Separate Assets May Have Become Marital Property

Posted on: 7 June 2021

During a divorce, it's important that you and your spouse identify all the assets or money that could be marital property subject to division. Leaving marital property assets off the table lowers the amount with which you will walk away from the divorce. So even if a particular asset or assets seems like separate property — items your spouse entered the marriage with — don't rule out that it may have become marital property.

Here are the three main ways this may have occurred. 

1. Transmutation

Transmutation of an asset occurs when the title changes from individual ownership to joint ownership. If your spouse entered the marriage with an inheritance in a bank account, for instance, they may have needed to change that bank or account at some point. If your name was added to the account, it may have transmuted into shared marital assets.

The same could happen to a home bought prior to the marriage, vehicles, collections, and business interests. This is one rare occasion during divorce negotiations when the name on the title may matter. 

2. Commingling

By far the most common way that a separate asset becomes marital property is through the commingling of funds.

For instance, if your spouse had funds from a personal injury case completed before you married, those funds must never have been used to pay for household or shared expenses. It could not have been accessed to buy a car driven by both parties, to finance a family vacation, or to increase the value of a shared home. In addition, be aware of commingling through the addition of funds that are marital assets (like standard earned income during the marriage). 

3. Appreciation

Did your spouse keep their separate assets completely separate during the marriage? You may still have a case that the appreciation experienced during the marriage could be shared property.

The distinction is that the appreciation must have in some way been contributed to or caused by the other spouse (active instead of passive). So if you managed your spouse's separate stock portfolio, you may have a claim that growth occurred due to your actions and you should get a piece of that pie. 

Where to Learn More

Clearly, the line between individual and marital assets can be finer than it seems. Cases of transmutation, commingling, and active appreciation are important but complex situations in any divorce. They can represent a significant portion of assets you deserve to receive in negotiations.

Contact a local divorce lawyer who will build a solid case for dividing your assets. Make an appointment with one in your state today to get started.