What is “Commingling”?
In financial circles, commingling is the practice of mixing together customer account securities with the account securities that are the property of the bank, realtor, or brokerage. The process of commingling makes it difficult to determine which assets are the property of the client, and which securities belong to the entity managing the client assets. In most areas of the financial world, commingling is considered to be both unethical and a breach of trust. Depending on the jurisdiction, the practice may also be illegal. The practice of commingling should not be confused with the practice of placing customer securities into a common trust account. Combining the assets of two or more customers in a common trust is a strategy that is often employed to maximize the return on investments made on the behalf of the clients involved. Within this scenario, there is no doubt as to the amount of assets contributed by each client, so the process of allocating gains or losses is very simple. By
Certainly it is clear that, if someone places non-marital funds (E.G. Inheritance) into a joint account the property is commingled. (IRMO Vehlein, 265 Ill. App.3d1080, (1st Dist., 1994). In so doing, the money deposited lost its identity. That is the key to determining if there is commingling. The mere mixing of marital and non-marital property may not be enough to constitute commingling. For example, where monies from a non-marital partnership are deposited into a common cash account consisting of several sub accounts, one of which was the vessel into which marital income was deposited, the Appellate Court has held that there is no loss of identity and therefore no isue of commingling (IRMO Landfield, 209 Ill.App.3d 678, (1st Dist., 1991). When a new asset is acquired through a combination of marital and non-marital property, there is a loss of identity and the property will be treated as marital. In IRMO Patrick, 599 N.E.2d 119 (4th Dist., 1992) the husband solely owned certain farm
