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Commingling a critical factor for inherited assets

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When Michigan couples decide to end their marriages, the process requires the division of marital property. Assets received by a party through inheritance might be at risk of claims by an estranged spouse if the funds had been commingled with marital assets. For example, a spouse deposits inherited cash into an account held jointly with the other spouse. This act has commingled the money with marital money and very likely changed its status from a nonmarital asset into a marital one. Spending a portion of inherited money on a marital residence, either to buy one or remodel one, also would turn it into marital property.

The concept of commingling also applies to an inheritance acquired before someone gets married. Commingling could occur when the person deposits the inherited money into a joint marital account or marital assets are put into the account holding the inheritance. A person concerned about the status of an inheritance before entering marriage could consider creating a prenuptial agreement to establish its nature for purposes of property division.

When commingling does not occur, the law generally views an inheritance as an asset separate from the marriage and belonging only to the heir. This immunity would prevent a court from assigning a portion of it to the other party. In some cases, the heir might be required to show documentation proving that no commingling occurred.

The property division stage of divorce proceedings can become contentious, especially where the couple has extensive assets or sentimental items. An attorney can often be of assistance in negotiating an agreement that takes the decision out of the hands of a judge.

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