Commingling Definition

The act of mixing the funds belonging to one party with those of another party. Usually, spouses or business partners may commingle assets without a problem. However, in community property states, a spouse may run the risk of turning separate property into community property (transmutation). Business partners may have to account to each other. Trustees, guardians, agents, and other fiduciaries must be careful not to commingle the funds that they are caring for with those of their own, since commingling is generally prohibited as a conflict of interest.