Couples preparing for high-asset Kentucky divorces often worry about preserving specific assets. For example, one spouse might want to protect a small business or a retirement savings account that they started before they ever got married.
One of the more common ways to protect assets from division in a divorce is to establish that those assets are technically separate property that belongs to one spouse. Under Kentucky’s laws, equitable distribution rules apply to marital property but may not have much impact on separate property that belongs to one spouse or the other.
Gifts, inherited resources and assets owned before marriage might be separate property. However, commingling those resources might give the other spouse a claim to those assets. For example, the following types of behavior might lead to claims of commingling during property division proceedings during a high-asset Kentucky divorce.
Reinvesting in an asset
Businesses and real property can easily be the most valuable resources owned by those preparing for divorce. They may have already acquired those assets long before they decided to marry. In theory, acquiring an asset well before getting married means it is separate property that someone does not need to divide. In practice, people frequently need to use marital resources to maintain assets that could be separate. They might use part of their salary to pay property taxes or to make upgrades to the home where they live with their spouse. They might reinvest some of their income in the business. The use of marital assets to maintain or improve separate property could lead to claims of commingling.
Granting a spouse partial ownership
Some people add their spouses to financial accounts that they could hold as their separate property because they acquired them prior to marriage or through an inheritance. Other times, they might modify the title records for the home that they owned before marriage to add their spouse as a legal owner. In scenarios where one spouse gives the other ownership interest in an asset that was previously separate, the non-owner spouse can potentially try to claim that asset during divorce proceedings later.
Combining separate and marital property
Commingling sometimes involves combining marital resources with separate property. If someone receives a large cash gift or inheritance, they might take those funds and deposit them into a joint financial account. The choice to hold the property in an account that technically belongs to both spouses and that contains marital property could lead to claims of commingling later. Any actions that give a non-owner spouse access to or control over separate property might ultimately lead to them claiming the separate property is part of the marital estate.
Looking at financial records carefully can help people determine if commingling has occurred and establish what assets they can protect as separate. Those preparing for high-asset divorces often need a comprehensive strategy to limit their risk of losing assets that they could otherwise keep as separate property.
