Commingling is an often-misunderstood legal term, but it’s an important concept to grasp when it comes to the ownership of assets. In essence, commingling is the act of mixing or combining two separate entities into one, in the world of finance or law. This can mean combining money, property, or other assets.
In the traditional banking world, commingling happens when an individual deposits funds into a bank account. The account holder may deposit funds from two separate sources, such as wages from their employer, or money that was saved up in a separate savings account. The bank account is considered a commingled fund, since the funds from different sources have been combined into one account.
In the legal world, commingling often refers to a situation where one person blends or mixes money, assets, and other property from two or more distinct legal entities. For example, if a married couple has assets in both their personal and business accounts, it would be considered commingling. This is because the assets are no longer strictly owned by their individual entities—in this case, either the husband or the wife—but are instead pooled together into one account, or subject to shared ownership.
It’s important to understand commingling, since it’s a concept commonly encountered in legal proceedings. It’s also relevant to areas such as estate planning, where it can have important implications. While commingling doesn’t necessarily have any intended legal consequences, it can become an issue in court or in other financial and legal proceedings, so it’s important to be aware of the concept.