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How commingling of assets affects high-asset divorces

On Behalf of | Mar 11, 2024 | High-Asset Divorce

In high-asset divorces, commingling of assets can complicate the process significantly. When spouses mix their separate assets with marital assets, it can be challenging to determine what belongs to whom for the purpose of division upon divorce.

Here are some specific ways on how commingling can affect high-asset divorces:

Increased complexity

High-asset divorces often involve various asset types, such as real estate, business interests, investments and retirement accounts. If spouses have commingled these properties before the divorce’s finalization, the process can be more complex and require considerable effort. It would typically require forensic professionals to trace the origins of the assets to determine what is marital and what is separate property.

Implications on distribution

In Michigan, divorce only affects marital properties, which courts divide fairly and equitably between spouses. Separate properties, including those a spouse owns before the marriage or acquires as a gift or inheritance, are not subject to the division. However, if spouses have commingled separate assets with marital assets, the courts might consider those as marital property and consequently, subject them to the division.

Valuation disputes

In high-asset divorces, an accurate valuation of assets is crucial. However, commingling makes it additionally difficult to assess the true value of individual assets, which can lead to disputes and stretch out the divorce process.

Protect yourself from the consequences of commingling

A careful review and determination of asset types can help you protect your property rights in a divorce. This includes proving that an asset has not been subject to commingling and is in fact a separate property. This is possible through a mix of methods, such as adequate documentation, strategic planning and the guidance of a knowledgeable legal representative.