How to Deal With Commingled Assets in a High Net Worth Divorce
Logically, most couples should plan for the future when they get married, and this includes the possibility of a divorce. In practice, many couples fail to plan for this possibility. Many divorces come completely out of the blue, and spouses may have been under the impression that a divorce was unthinkable. Unfortunately, sometimes the unthinkable does happen. If you are going through a high net worth divorce in North Carolina and you did not see it coming, you may have commingled your assets.
Commingled assets represent a major source of stress for all couples, but this situation can be especially frustrating for couples who have high net worth. Millions of dollars in separate property might have been mixed together with marital property, and you might be understandably concerned about how equitable distribution will take place. By all accounts, separate property legally belongs to you. In practice, separate property is often distributed after it has been commingled.
If you want to approach this challenging situation with your best foot forward, your best bet is to enlist help from a qualified, experienced divorce attorney in North Carolina. These legal professionals are familiar with many of the unique challenges associated with high net worth divorces, and they can help you keep hold of assets even if they have been commingled.
- What Are Commingled Assets?
- Can I Get My Separate Property Back Once it Has Been Commingled?
- Avoiding Commingled Assets in the First Place
There are many complicated legal terms you might hear during a divorce in North Carolina, and “commingled assets” is definitely one of these phrases. To understand commingled assets, you must first understand the concepts of marital and separate property:
- Separate Property: Separate property is all property that you accumulated before the marriage took place. In addition, certain assets like inheritance money are also counted as separate property. Separate property is not eligible for equitable distribution during a divorce, which means you will keep these assets in their entirety after you walk away from your marriage.
- Marital Property: This is property that you accumulated over the course of your marriage. Unlike separate property, marital property is eligible for equitable distribution. This means that you will likely only receive part of the assets that you accumulated during the marriage.
So, what are commingled assets? As you might have guessed, commingled assets are a mixture of both separate and marital property. For example, you might have received an inheritance check and then used the proceeds to put a down payment on a home. If this real estate purchase was made during a marriage, then your separate property has now been commingled with your marital property.
Some divorce attorneys will tell you that once assets have been commingled, there is not much you can do. In many cases, commingled assets are simply counted as marital property and then divided through equitable distribution. However, this is not always true. In the case of a high net worth, this laissez-faire approach just is not good enough. A skilled divorce attorney can help you get your assets back with a number of helpful strategies.
If considerable sums are tied up in commingled assets, then it makes sense to trace these assets in an attempt to divide them into marital and separate property once again. This is by no means an easy feat, but it can be done. Your first step should be to claim to the court that some of your assets have been commingled.
Next, you will need to trace your assets. Hiring a forensic accountant or other experts may be necessary, as you will need to go through your financial records with a fine-toothed comb. Eventually, these experts can search through purchase records, mortgage statements, and bank account records to show how much you contributed to the joint asset prior to the marriage.
Of course, the best way to avoid this situation is by preventing it from happening in the first place. The first and most obvious solution is to never commingle these assets together during your marriage. Alternatively, you can create a prenuptial agreement that covers these situations prior to the marriage. That being said, hindsight is always 20/20.
If you have been searching for a divorce attorney in the Charlotte area who can help you resolve commingled assets, look no further than Arnold & Smith, PLLC. We have a wealth of experience with high net worth divorces in North Carolina, and we have successfully helped many spouses walk away with the separate property that rightfully belongs to them. Reach out today, and we can help you keep hold of your assets - even if they have been commingled. Give our office a call at 704-370-2828 to set up a consultation.