When couples fall in love and get married, they begin sharing their lives together including hobbies, friends, and finances. Couples in Florida often don’t realize they could also be changing the fate of their financial future! It’s one thing to split dessert or merge playlists, it’s quite another when “what’s mine is yours” becomes legally binding without you even realizing it. Welcome to the world of commingling, a term that might sound technical or abstract, but plays a huge role in what happens to your finances if your relationship ends.
In Florida, which follows the principle of equitable distribution, understanding how separate property can accidentally become shared is more than just smart, it’s essential. But what does commingling even mean? And how could it affect my investments? Keep reading to find the answers to your questions and to learn more about protecting your assets.
What does commingling mean in Florida?
Before jumping into the complexities of commingling, let’s uncover how Florida defines property. Property is classified as either separate property or marital property. This distinction is critical to understanding how courts will divide your assets upon the dissolution of marriage. Separate property is property that solely belongs to you and is excluded from division upon divorce. Separate property can include assets or money you earned or acquired prior to marriage, inheritance, gifts clearly given to you before or during marriage, or income from a personal injury lawsuit excluding any negative financial effect to the marriage.
Marital property, on the other hand, is anything earned or acquired during marriage. This can include income, real estate, retirement accounts, appreciation on separate property, and more. In Florida, Marital property is distributed fairly and equitably regardless of who actually earned or acquired the property. “Fairly and equitably” does not necessarily mean 50/50.
Now, what is commingling?
At its core, commingling is when you take separate property that legally belongs to you alone and you mix it, even unintentionally, with jointly owned assets. That act of combining the two can change the legal character of the property completely. Understanding commingling and how it can happen will go a long way in helping you protect your assets from division in the future. A key word to remember is “unintentional.” In Florida, even if you didn’t mean to mix your separate assets with marital assets, a court could likely view your separate property as now being inextricably mixed with the marital estate. Some states like New York, pay very close attention to a person’s intent when they mix their assets. But in Florida, the mere act of mixing separate property with marital can forever change the classification of that asset regardless of intent.
Here’s an example to help illustrate this principle.
Let’s say you saved $50,000 in a separate bank account leading up to your wedding. After marriage, you deposit that money into a joint account you share with your spouse and use it to help with the daily expenses of marital life or renovating a home. It’s very likely that Florida would now consider those funds marital property. This means that the $50,000 that you deposited into your jointly owned bank account is now subject to division if you divorce even though that money clearly started out as yours. This is because Florida courts don’t solely look at the genesis of the funds, but how the funds were treated during the marriage. Did you keep that specific asset or funds separate and clearly documented? Or did it become mixed with marital funds or a marital asset?
The same goes for real estate property! If you own a home before marriage and later add your spouse to the title of the house or use joint bank account funds to renovate or pay down the mortgage, without realizing it, you may have transformed your separate property into a marital property. And if you’re unable to very clearly trace which funds were separate and which funds were shared, courts often assume the whole thing is within the marital estate.
Why does commingling matter in a Florida divorce?
Florida courts divide marital property according to the principle of equitable distribution. This means that a judge will divide the marital estate in a manner which he or she deems to be fair and equitable. This doesn’t necessarily mean equally (50/50). Once an asset is classified as marital, it will be included in the pool of what’s split between you and your partner. So that $50,000 savings you deposited into your joint bank account, or that home you bought before marriage but improved with joint funds? If they have been commingled…which in our examples above, they were. Those assets are likely to be included in the distribution pool.
The 1981 case of Knott v. Knott, the husband owned a business prior to marriage and argued that the business should be classified as his separate property during a divorce years later. The court found that his wife also contributed to the business and the profits were used for marital purposes. The business was found to have been transformed into marital property and was subject to equitable division (Knott v. Knott (1981)). Similarly, in the more recent 2017 case of Hooker v. Hooker, the Florida Supreme Court found that assets and investments the husband owned prior to marriage had become commingled with the marital estate because he and his wife both managed and benefited from these funds during marriage (Hooker v. Hooker (2017)).
As you can see, commingling could have an enormous impact on your financial future! This is why understanding and avoiding commingling isn’t about being selfish or not trusting your partner, it’s about being intentional with your assets so you have clarity on your finances. Most people don’t realize that once separate property has been blended beyond recognition, it’s extremely difficult (and expensive) to untangle. Courts want to see clear documentation, consistent financial behavior, and, ideally, a legally binding agreement that defines how assets should be treated before problems arise.
And this is where prenuptial agreements come in handy!
The preventative power of a prenup
A prenuptial agreement isn’t just for high-profile or wealthy individuals like NFL players, moviestars, or yacht owners. In Florida, it serves as a versatile tool for couples to protect their financial interests. A prenup can be tailored to address specific needs, helping to prevent accidental commingling or the unintentional transmutation of non-marital property into marital property . By clearly defining which assets are separate and which are shared, a well-crafted prenup outlines the consequences if these distinctions become unclear. This customization may help couples recognize which assets are meant for use in the marital estate and which should remain separate, effectively preventing any unintentional mixing.
For example, a prenup can specify that any inheritances and premarital savings remain separate, even if some of it is used for marital purposes. It can require both spouses to agree in writing before combining funds or include specific tracing methods to ensure that a party who contributes separate funds to a marital home or joint investment are reimbursed fairly. It can even include language that protects future appreciation of separate property, so if your real estate or retirement account grows over time during the marriage, that growth isn’t automatically shared unless agreed upon in the prenup.
While a prenuptial agreement can help clarify the treatment and classification of assets, distinguishing between separate and community property, it cannot entirely safeguard assets from commingling. To enhance protection, it’s crucial to include clauses crafted by a skilled attorney that address the unintentional conversion of non-marital property into marital property. Despite these precautions, courts may still determine that an asset has become inextricably mixed with marital property, necessitating its distribution during a divorce.
The best prenups are customized to fit your unique situation. If one spouse owns a business, receives family gifts, or plans to pause their career to stay home and raise the children, those issues can and should be addressed. This isn’t about planning for divorce, it’s about planning for your life together with mutual respect, transparency, and foresight. It’s not protection from each other, it’s protection for each other.
Florida commingling in a nutshell
If you’re in Florida and unsure whether you’ve already commingled assets, or if you’re engaged and want to protect your assets from the consequences of commingling, find a family lawyer in your area who’s familiar with prenuptial agreements. A legal professional can help you understand your options, draft a prenup that aligns with your goals and values, and can make sure that the language in your prenup abides by Florida laws. Also, visit highly regarded online prenup drafting services like HelloPrenup to help craft a personalized prenuptial agreement that can protect you from the financial and emotional strain that comes with commingling your property. By planning ahead, you have the privilege of predetermining what property is protected from division if there’s a divorce in the future. Now, go talk with your partner and get on the same page so you can merge your lives intentionally!
Adalbert is experienced in all things family law. With over 25 years of professional experience including 4 years as a practicing lawyer, he is passionate about helping couples reach their goals within their prenup. He’s particularly passionate about helping couples get the best possible start to their marriage and set their marriage off on the right foot.He’s licensed in Florida, fluent in English and Spanish, and one of the founders and managing partners of Apfelbaum Martinez Law.
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