In a typical divorce, only marital assets are up for division. Everyone gets to keep their separate property. But what happens to assets when it’s hard to determine whether they belong to one spouse or both?
There is a term for that — commingled assets. It’s important to pay attention to those during a divorce. Otherwise, you may lose out, as explained below.
The law in Kentucky
Kentucky law presumes that all property acquired by either spouse after the marriage and before a decree of legal separation to be marital property, regardless of whether one spouse individually holds a title, if there is one.
However, the legal presumption above can be overcome by showing that the property was acquired using non-marital assets or proceeds. For instance, if you bought a house or any other asset during the marriage using inheritance money (separate property), it is presumed to be marital property unless you can show that you purchased it using personal funds.
Tracing commingled assets
Without a legally binding document like a prenuptial agreement that specifies who owns what, tracing the commingled assets back to the source can help separate marital and personal property. Remember, the goal is to show that all or part of the commingled assets should not be considered marital property.
It is not always so straightforward if there is no clear distinction. If necessary, you can involve forensic accountants to trace the separate property and remove it from the division table in a divorce.
Protect your financial interests in a divorce
You may have to deal with several issues during your divorce besides commingled assets, and it helps to have experienced legal counsel. You cannot afford to make costly mistakes or assumptions, especially when the stakes are high.