I Want My Money Back.
What happens to separate property that is commingled with marital property?
Divorcing spouses want to know how money in a joint checking or savings account will be divided between them upon divorce, frequently asking:
- Will my joint bank account be split 50/50?
- What will happen to monetary gifts to me only, that I deposited into a joint bank account shared with my spouse?
- What will happen to my salary and bonus deposits into a joint account?
- If an account (or other property) is titled in my name only, is it mine alone?
- If an account (or other property) is jointly titled, is it automatically marital?
This article will help you understand the basic legal theories judges apply when determining whether certain money is “marital property” (to be equitably divided between spouses – 50/50 unless a different division is fairer based on the circumstances), or “separate property” (to be maintained exclusively by one spouse), after the two are mixed (“commingled”) in a joint bank account.
First, the basics.
Marital property is broadly defined to include all property acquired by either spouse during marriage.
All money (and other property) is presumed to be marital property, subject to equitable division between spouses. New York’s Domestic Relations Law (“DRL”) Section 236 (B)(1)(c) defines “marital property” as follows: “all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held, except as otherwise provided in agreement….” As the statute clarifies, color of title is not dispositive (though can be considered) when determining whether property is separate or marital. This principle applies to all property, including to bank accounts. The most important question is when and how property was acquired: marital property is acquired during marriage, through the effort of either spouse, and the best example is salary and bonus earned as compensation for working a job.
Separate property is narrowly defined and must be proven.
DRL Section 236(B)(1)(d) sets forth specific categories of “separate property,” and the spouse seeking the court’s acknowledgment that property is separate must prove the property falls into one of them. Separate property is acquired:
- before marriage;
- after commencement of a divorce action (the complaint “filing date”);
- as a gift or inheritance from a party other than one’s spouse;
- as compensation for personal injuries;
- in exchange for separate property;
- by the increase in value of separate property, except to the extent that such appreciation is due in part to the contributions or efforts of the other spouse (including indirect efforts, like supporting the earning spouse by raising children or homemaking); or
- by describing property as such in a written agreement between spouses.
Property falling into one of these categories “originated” as separate property. However, its separate character can be transmuted to marital if it is commingled with marital property.
Separate property that is commingled with marital property is presumed transmuted to marital property.
When one spouse deposits separate property into a joint bank account, he or she is presumed to have intended for his or her separate money to become part of the marital pot. Said another way, he or she is presumed to have “donated” one-half of his or her separate property to the other spouse. Therefore, in general, commingling transmutes separate funds into marital funds, unless the depositing spouse can prove that he or she did not intend for the separate funds to become part of the marital pot/did not intend to share them equally with the other spouse.
How might commingled separate property retain its separate character?
The depositing spouse can rebut the presumption that he or she intended for his or her property to become part of the marital pot by “establishing by clear and convincing proof” that the funds in question (1) originated as separate property (see above); and (2) were deposited into a marital bank account “for convenience only.” Courts can look to a number of different factors to ascertain the depositing spouse’s “donative intent,” or lack thereof, including:
- Length of time the separate funds were commingled with marital funds, the following commingling periods having been held to indicate commingling for “convenience only,” rather than donative intent: “a few days”; “three days”; “six weeks”; and “one day”;
- Existence of other, equally easily accessed separate accounts into which the depositing spouse could have deposited his or her property;
- Spouses’ status when funds were deposited into a marital bank account: e.g., still living together or already separated in anticipation of divorcing; and
- The character of the joint account into which funds were deposited: functionally marital (e.g., used by both spouses to pay marital expenses and debts and obtain marital assets), or joint in title only.
The court’s ultimate goal is to understand the honest intention of the depositing spouse at the time he or she deposited his or her separate funds into a marital account: did he or she intend for the separate money to become part of the marital pot, and to share it equally with his or her spouse, or not? In most cases, as one might imagine, depositing separate funds into a functionally marital bank account, before separating or planning to separate from one’s spouse, and for a significant period of time, indicates the depositing spouse’s intention for the funds to become part of the marital pot. In this or similar cases, separate property commingled with marital property will be equitably divided as marital property upon divorce.
For additional reading on this topic, see:
- Clarifying the Concepts of ‘Transmutation’ and ‘Commingling’ | New York Law Journal
- Managing Marital Property: Do's and Don'ts - FindLaw
- Divorce Laws in New York (2021 Guide) | Survive Divorce
 DRL Section 236 (B)(5)(c-d) provides more clarity, and a list of factors courts consider when equitably dividing marital property. The statutory text is available here: New York Consolidated Laws, Domestic Relations Law - DOM §236 | NY State Senate (nysenate.gov).
 E.g., Schwalb v. Schwalb, 50 A.D.3d 1206, 1209 (N.Y. App. Div. 2008); Homkey-Hawkins v. Hawkins, 42 A.D.3d 725, 727 (N.Y. App. Div. 2007); Kay v. Kay, 302 A.D.2d 711, 713 (N.Y. App. Div. 2003).
 Signorile v. Signorile, 958 N.Y.S.2d 476, 478 (2d Dept 2013); C. v. R., 65 Misc. 3d 1205, 1 (N.Y. Sup. Ct. 2019).
 Wade v. Steinfeld, 15 A.D.3d 390, 391 (N.Y. App. Div. 2005).
 Noble v. Noble, 78 A.D.3d 1386, 1389 (N.Y. App. Div. 2010).
 Achuthan v. Achuthan, 179 A.D.3d 751, 758 (N.Y. App. Div. 2020).
 E.g., McGarrity v. McGarrity, 211 A.D.2d 669, 671 (2d Dept 1995).
 Chamberlain v. Chamberlain, 24 A.D.3d 589, 593 (2d Dept 2005); McSparron v. McSparron, 190 A.D.2d 74, 77-78 (N.Y. App. Div. 1993); Crescimanno v. Crescimanno, 33 A.D.3d 649, 649-50 (N.Y. App. Div. 2006); Schwalb, 50 A.D.3d at 1209.