When two things are mixed together, they are said to be commingled. This is a term that often relates to financial accounts, but it can technically be used with other types of assets, as well.
For example, you and your spouse may each have had a personal bank account when you got married. You then closed down these personal accounts, opened a joint account and commingled your financial assets by depositing them together in that shared account.
This can also happen with an inheritance. It is generally a separate asset, meaning that it only belongs to the person who inherited it – even if they’re married, their spouse may not have any rights to the fund. But if that person shares the inheritance with their spouse or stores it in a shared account, this can commingle the inheritance so that it is technically owned by both people.
When does this matter?
It’s important to understand how this works at any time when leaving, receiving, distributing or using an inheritance. But it is perhaps most important when a couple is getting divorced. A separate asset would not have to go through property division, but a marital asset would. In other words, commingling that inheritance could mean that someone’s ex now has a right to at least a portion of the inheritance in a divorce.
Understandably, this is not the goal that many families have, as they want to keep the money within the family. Someone who is creating an estate plan may want to take steps to protect the inheritance, and a person who has received such an inheritance may want to keep it separate so that it is never commingled. This can create a fairly complex financial situation, so it’s good for all involved to understand their legal rights.