Understanding commingling or transmutation of assets

Last updated on April 8, 2021

If you are getting divorced, there may not be that many aspects of your split that seem black-and-white. For instance, emotionally, you are likely torn between many complicated feelings from fear of the unknown to frustration with the past; physically, you may not understand where to go or where you will live. 

You can also be struggling with a number of financial gray areas in your divorce as well. For instance, you may know that in Georgia, marital assets can be eligible for distribution while separate or individual assets are generally not. However, the distinction between these two types of property may not be as clear as you think. 

For instance, property that starts as separate can change into marital property if it is commingled or transmutated. 

Commingled assets are those that initially belong to an individual but through the pooling of money or other process become shared. For instance, let’s consider an inheritance. If you inherit money from a relative, it can be considered a separate asset belonging to you alone.

However, if you take that money and use it to buy a marital home, invest in your spouse’s company or deposit it into a shared account, that transfer can change a separate asset into a marital asset.

As noted in this Forbes article, there are ways to rebut the presumption of transmutation and/or protect a separate asset with a prenuptial or postnuptial agreement. However, this can require some considerable planning and legal knowledge.

This is a very brief overview of what commingled assets are and again, when it comes down to specific situations and assets, it can be more complicated than you expect. While this can be quite frustrating, you do not need to figure out all this on your own. You can discuss the details of your individual case with an attorney familiar with the complexities of asset division laws and procedures in Georgia.

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