smqqth
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Reged: 01/12/09
Posts: 7
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One spouse has a trust fund that is non-marital property. During the 22 year marriage the trust invested in real estate that was the family’s primary residence. Marital income was used for about 6 years to repay the loan, just like a mortgage. When a conventional bank loan was a better option, the mortgage asset was moved out of the trust. At the time the mortgage was moved, marital funds were used to buy down the loan from the trust to a conforming (non-jumbo) amount. Would a court agree that the non-marital trust fund was co-mingled into a marital asset through the mixing marital funds (principle and interest) with the trust fund assets so the trust is now marital and subject to equitable distribution? Thanks!
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Maury
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Loc: This Asylum --->
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Not likely. The is a strong argument to be made that eth funds remain nonmarital. The funds were put in as a loan to be repaid. That is not commingling the funds so that they lose their identity. In fact, it is the opposite, preserving the nature of the the nonmarital asset by identifying the amounts put in and to be paid back.
The one thing that is certain is that the funds that remained in the trust were not loaned for the home remain non-marital and unreachable.
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smqqth
recently joined
Reged: 01/12/09
Posts: 7
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Thanks Maury! I thought comingling occurs if it is not possible to identfy one dollar from another as it relates to marital or non marital. In my case, when a pool of marital money was used monthly to repay the loan and buy down the mortgage amount while refinancing , how would it be possibe to identify and determine ownership of specific dollars? These dollars were forever mixed into the trust fund, and invested, re-invested.... for years. Maybe it does not matter but during the period of time when the real estate was held in trust, both parties names were on the note.
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Redlegg
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Wouldn't the house be marital property under the circumstances, and not the trust. It looks like the trust was acting as a lien holder only.
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smqqth
recently joined
Reged: 01/12/09
Posts: 7
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Thanks Redlegg! My issue is limited to the co-mingling of marital with non marital assets. Does it really matter if the trust was only acting as a lien holder? Marital assets are now and forever comingled with the (formerly) non-marital trust.
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Redlegg
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Reged: 10/05/06
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Your probably right, but I weas just thinking if you replaced the word trust with bank in the original loan, it seemed like the trust was acting as a bank. The trust bougth the house, the marriage paid the trust back, trust sold mortgage to bank or marriage refinanced with bank. But again, not my area of expertise.
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