When you marry someone in Indiana, you expect to merge your lives. This often includes financial assets. Family law refers to shared finances as commingled assets, which upon divorce, couples must divide.
The two main types of properties in marriage
When it comes to property division, couples must identify which of their assets are separate and marital. Separate properties are exempt from equitable distribution, meaning the law doesn’t expect you to give part of it to your spouse. They include items acquired before marriage, inheritances and gifts from third parties. Marital properties, on the other hand, are equally owned by both spouses, and couples must split them upon divorce.
The danger of commingled assets in Indiana divorce
The complication arises when a couple commingles their separate or marital property. This means that one or both spouses have mixed individual-owned assets with jointly-acquired ones, making it challenging to determine which properties belong to whom after a breakup. For example, if a husband bought stocks before his wedding but he continued investing those same stocks during the marriage using a joint account, the court can classify those stocks as commingled assets, subjecting them to division in a high-asset divorce.
One of the easiest ways to avoid commingling problems in the future is to set up a marital agreement. This legal document can specify how spouses handle their separate finances and joint assets during the marriage. You may also create an inventory of your properties for easy identification if the time comes to divide assets. Additionally, when you receive an inheritance or a gift, it is important to keep the paperwork or evidence of ownership separate from the marital funds. This way, you can prove that they are yours and only yours.