What is Considered Commingled Property, and How is it Handled in an Illinois Divorce?

Dividing property during a divorce can feel overwhelming, especially when the line between what’s yours and what’s shared becomes unclear. This is where commingled property often comes into play, and it can make an already emotional process even more complicated.

At The Women’s Divorce & Family Law Group, we’ve helped hundreds of people just like you navigate the complexities of commingled property and achieve favorable outcomes. We understand how stressful this process can be, and we’re here to guide you every step of the way. In this post, we’ll break down what commingled property means, share examples, explain how it’s handled in Illinois, and give you tips to protect what’s rightfully yours. Let us take the burden off your shoulders—you don’t have to face this alone.

What Is Commingled Property, and Why Is It Important?

Under Illinois law, assets acquired during a marriage are generally classified as marital property and will be divided equitably during a divorce. However, property owned individually before the marriage is typically treated as non-marital property, remaining with the original owner.

Trouble arises when personal assets are mixed with marital property or when both spouses’ assets are combined. This blending is referred to as commingling. Simply put, commingled property is when non-marital assets are partially or fully integrated with property or finances associated with the marriage.

Understanding whether property is truly commingled is crucial because once non-marital property loses its original identity, it may be partially or wholly treated as marital property during a divorce.

Examples of Commingled Property

To better understand commingled property, here are some common scenarios:

• Inheritance combined with joint funds  

Suppose one spouse inherits money before the marriage but deposits it into a joint checking account shared with their spouse. Over time, as new funds are deposited and spent from that account, the inheritance becomes indistinguishable and thus commingled.  

• Mortgage payments on a pre-marital home  

If one spouse owned a property before marriage but mortgage payments were later made using joint marital income, the property may partially transition into a commingled asset.

• Investment accounts mingled with marital funds  

Contributing marital funds into a pre-marital investment account, or vice versa can lead to the entire account being classified as commingled.

• Business ventures intertwined with marital efforts  

For example, if one spouse owned a business before marriage but the other actively contributed labor, experience, or funds during the marriage, the business may be deemed commingled.

The key factor is whether the original non-marital property has retained its separate identity or whether it has become intertwined with marital assets to the point where it is inseparable.

How Commingled Property is Handled in an Illinois Divorce

Illinois family courts follow the principle of equitable distribution rather than a strict 50/50 division of marital assets. When handling commingled property, courts aim to determine the most fair solution based on the specifics of each case. Here’s how the process typically works:

1. Classifying Property  

Courts first identify and classify all assets either as marital or non-marital property. The challenge with commingled property arises when the original ownership is unclear or when both spouses contributed to the asset.

2. Tracing Ownership  

Evidence like financial records, receipts, or statements can help “trace” an asset back to its original source. If clear documentation shows the non-marital origins of an asset, portions of commingled property may be restored to the original owner.

3. Determining Reimbursement  

If commingled property includes contributions from one spouse’s non-marital assets, the court may order reimbursement. For instance, if funds from a pre-marital savings account were used for marital expenses, those funds may be subject to reimbursement.

4. Considering Contributed Value  

When one spouse improves or helps increase the value of a previously non-marital asset—such as growing a pre-existing business—the court may consider the contribution and award a portion of that increased value to the other spouse.

Due to the complexities of commingled property, it is crucial to seek legal counsel to protect your interests and ensure an equitable outcome.

Tips for Identifying and Preserving Non-Commingled Property

Avoiding or resolving commingled property disputes begins with good documentation and financial practices during marriage. Here’s how to safeguard your non-marital assets:

• Keep Detailed Records  

Maintain clear financial records for any non-marital property, including when and how it was acquired. Documentation is key to proving an asset’s original ownership.

• Avoid Combining Funds  

Refrain from depositing non-marital funds (such as inheritance) into joint accounts. Separate bank accounts for personal funds ensure clearer classification.

• Draft a Prenuptial Agreement  

A prenuptial agreement can help pre-identify non-marital assets, outlining ownership and minimizing future commingling disputes.

• Define Contributions  

If you anticipate improving or investing in a property owned by your spouse, agreements or contracts can help specify the value and ownership of contributions.

• Consult Legal Professionals Early  

If you’re married and concerned about property commingling, speak to an experienced divorce attorney now. Proactive legal guidance can save significant time and stress if divorce becomes inevitable.

Secure Support for Complex Divorce and Property Division

Commingled property cases are legally nuanced and often require premier legal assistance to protect your financial future during a divorce. The friendly, knowledgeable team at the Women’s Divorce & Family Law Group is skilled in guiding women through complex divorces. Whether you’re unsure about your rights to certain assets or need help navigating Illinois’ property division laws, our attorneys are here to help. Contact us today – we want to help you find success.