Commingling

Commingling broadly refers to the mixing or blending of funds or assets that belong to different parties or have different legal statuses. It can occur in various contexts, including investing, family law, and fiduciary responsibilities.

Here are the key definitions and contexts:

• In investing, commingling is the pooling of money from different investors into a single fund. This practice allows for benefits such as lower fees and access to larger or more diverse investments. For example, mutual funds combine individual contributions into one fund managed toward a specific objective.

• In fiduciary or legal contexts, commingling refers to the improper mixing of client or third-party funds with personal funds by a fiduciary (such as a lawyer, landlord, or property manager). This is generally illegal or unethical because it risks loss or misuse of the client’s money. For instance, a landlord mixing tenant security deposits with their own operating funds is an example of commingling.

• In family law, commingling describes the blending of separate property (owned individually before marriage or by inheritance) with marital or community property during marriage. This can complicate asset division in divorce because separate property may lose its distinct status if commingled with marital assets, such as depositing separate funds into a joint bank account or adding a spouse as a joint owner of separate property.

In summary, commingling means mixing funds or assets that should be kept separate, either legally or contractually, which can have significant financial and legal consequences depending on the context. It can be a legitimate practice in investment pooling but is often problematic or illegal when it involves fiduciary duties or marital property distinctions.