Mixing Marital and Non-Marital Assets in Pennsylvania
Many Pennsylvania courts have held that “commingling” marital and non-marital assets “transmutes” the non-marital assets into marital assets. This means that funds or an asset, which would otherwise not be subject to division in a divorce, become marital and subject to division in a divorce.
Courts have rationalized this legal concept, as in Winters v. Winters, holding that tracing funds and transactions throughout the years of marriage creates a near impossible task.
An example of this occurred in the Pennsylvania case Verholek v. Verholek, where the court was asked to determine whether the husband’s inheritance from his mother was marital property. The court stated that generally, property acquired by bequest is non-marital property. However, the husband had transferred the inherited funds into a brokerage account in his name alone, which also held marital funds. The court held that “because the inherited funds were co-mingled with marital funds, and husband did not consider the inherited funds to be separate non-marital property, we conclude that the trial court did not err in finding that husband’s inheritance was marital property.”
Even if the asset is found to be marital, courts have equity power to distribute the asset in a manner different than other assets. In the Winters v. Winters case, although the husband’s premarital account was held to be 100% “marital property”, the Superior Court provided the husband with a credit based on the premarital value of the account.