How will the Court handle commingled assets and debts in a Louisville divorce. Generally speaking, there are principally two types of marital property in a Louisville divorce – “marital property” and “separate property.”
Basically, marital property will encompass any assets and debts which are obtained by the parties jointly or separately from the date of the marriage to the date of separation. There are a few exceptions such as Social Security, personal injury settlements and properly structured and maintained inheritances. Separate property is generally any asset or debt which either of the parties held prior to the date of the marriage or entered into after the date of separation.
In order for an asset to remain the “separate” property of either party, one must never use marital assets or work to enhance or support the separate asset. If it is a financial account, there should never be money moving from marital accounts to the separate asset. If it is some form of property, marital monies and/or labor should not be used to maintain or improve a separate asset. When the lines are blurred between a separate asset and a marital asset it can lead to commingled assets and debts in a Louisville divorce.
One common example is spouse “A” owns a house prior to the marriage. This property is sold and the proceeds are used to purchase the marital home. In most cases, the “profit” from the sale of a separate asset should ultimately be determined to be separate property. However, separating the “separate property” from the “marital property” in these cases can be quite challenging.
Another example might involve a business or professional practice. If a company was a “separate” asset of one of the spouses, but marital funds were used to support the business the asset could be considered to be commingled.
Disputes are very common when it comes to marital property division in a Louisville divorce. The Court must determine the nature of any asset or debt (marital or separate) prior to the ultimate division of the marital assets of the couple. If an asset has become commingled the process to determine the ultimate present value of the asset as well as the allocation of that value between the parties based upon what is “separate” and what is “commingled” can be legally and financially quite complex.
This is why it is important to work with the divorce and family law attorneys at Dodd & Dodd.
We invite you to review the strong recommendations of our former clients and contact us or call 502-584-1108 to schedule an appointment with one of our experienced divorce and family law attorneys.
