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Can marital and non-marital income and debts offset each other?

Louisville, KY |

Example: Assuming the marital/non-marital status of all money and debts is easy to prove, and that everything described here happened shortly before the divorce: The husband received $100,000 in marital income and put it in his bank account. Then, from another bank account, which consisted of non-marital money, he paid $100,000 of marital debts. If he had paid from the marital $100,000, there would be no issue, because his non-marital money would not have been touched. Does it become a big problem because he paid from the wrong account? Or is it just a matter of offsetting one with the other?

Note that this is not nearly as complicated an issue as the example is. It's a very simple issue which happens to need detailed examples to clarify exactly what the issue is.

Attorney Answers 3

Posted

It actually is quite complicated. Under some circumstances the court may accept the innocent mistake/convenience argument, but other judges may not.

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Posted

My guess, and that's all it is because one never knows what a judge is going to do, is that with tracing(showing the monies in and out), the judge should see the error plainly enough. I hope, with this money riding on it, you'll be using an attorney.

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Posted

With respect to assets, it is the responsibility of the person claiming that an item or funds are non-marital to prove the source of the asset, i.e. to trace the asset to a source that makes it non-marital according to the language in the statute. With respect to debts, there is not a presumption that any debt incurred during the marriage is marital, so if one spouse enjoyed all of the benefit of the borrowed funds, that debt could be characterized by a court as non-marital and the sole liability of that spouse.

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