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Commingled Property in Texas: What Is It & How Can It Impact Your Divorce?

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“Commingled property” is a commonly misunderstood term you may come across during a Texas divorce. While most couples are reasonably aware of what community property and separate property are, few truly understand the repercussions when these two intermix. This can often be the source of disagreement as to how property should be divided and potentially lead to an unnecessarily lengthy tussle. For this reason, it’s important to learn the concept of “commingled property” before giving the green light to your divorce case.

What are Commingled Assets?

Commingled assets in a Texas divorce are simply assets that are partly community property and partly separate property. 

In other words, the aspect of “commingling” arises when separate property mixes up with community property—deliberately or otherwise— so much so that it becomes difficult to draw a clear line between the two.

In Texas, commingling can happen in a number of ways, for example:

  • One spouse mistakenly or knowingly deposited separate funds in a joint bank account
  • One spouse contributed to the improvement or maintenance of separate property owned by the other partner
  • One partner deposited inheritance in a shared bank account
  • One partner spent a substantial amount of time managing separate investments during the marriage
  • Spouses acquired real estate property in their joint names with a down payment from the separate account of one or both partners.
  • The spouses drew up a joint, written agreement stating that separate assets are to be changed to community property forthwith.

How Commingling Can Affect Your Texas Divorce

Commingling of assets can have wide ranging implications on the divorce process.

First, the court might be forced to intervene and split the commingled property as it deems best. As you may have already experienced, court interventions do not always result in satisfactory decisions for either party involved. In a worst-case scenario, some of the separate property that you struggled so hard to earn over the years might find its way to the other party’s hands, simply because you couldn’t reach an amicable agreement soon enough.

Secondly, commingling might lead to an unnecessarily lengthy divorce case. That’s especially the case if you and your soon-to-be-ex can’t seem to see eye-to-eye. A lengthy-divorce case means higher costs both in legal and attorney fees.

Lastly, the trickle-down effect of commingling can be devastating to the children involved as well, if any. An uncontested Texas divorce is a much better experience for children than a contested one. The emotional and psychological impacts of a hotly contested divorce, one where commingling is the center of disagreement, can be too difficult for a child to recover from.

Keep Separate Property, Separate

If you want to steer clear of the above commingling repercussions, then it’s best to keep separate property separate from the get-go.

Here are a few suggestions in this regard:

  • Have an attorney draft an elaborate, well-expounded pre or post-nuptial agreement on your behalf 
  • For any and all property acquired before you exchanged vows, make sure that it’s only your name that’s on the deed(s)
  • Avoid transferring funds between jointly owned and separate accounts
  • Avoid using personal funds to maintain or improve community assets
  • Ensure that for every large purchase you make as a couple (say, a car or real estate), you exhaustively discuss the nitty-gritty with your partner and agree on whether it should be classified as separate or community property. If possible, draw up and sign an agreement stating the same.
  • Avoid using personal funds to offset debts incurred during the union

Before you and your better half say “I do,” it’s also a good idea to retain a qualified Texas divorce attorney to help you better understand the intricacies of protecting your separate property. Never underestimate the power of hiring an attorney who understands Texas community property laws inside-out.

Seek Experienced Legal Counsel for Any and All Questions You Might Have

Establishing commingled property can be surprisingly complicated, even in a state like Texas, where there are clearly-defined community property laws in place. If you have any questions regarding the specifics of your case, the attorneys at Petrelli Previtera are ready and willing to answer them to your satisfaction.

We have extensive experience in matters property division in Texas, not just commingling. So rest assured that when you forward your complex case to us, you’re betting on the winning horse that won’t disappoint whatsoever. You’re betting on a satisfactory outcome. You’re betting on a happy and peaceful future for you and your loved ones. Contact our Texas family law attorneys today to schedule an initial comprehensive consultation and kick-start your journey towards true freedom and complete peace of mind.

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