There are three ways to lose the non-martial property status. Non-marital property becomes marital when one; co-mingles, causes marital improvements, or is active in causing appreciation. When one of these scenarios occurs, the property will be classified as marital property.
Co-mingling is when the non-marital property is mixed with marital assets so it becomes difficult to determine which property is in fact the non-marital property. An example of co-mingling is when non-marital assets are placed in account with marital assets and the funds from the account are used to pay regular living expenses. By combining the non-marital funds and marital funds into one account and then paying regular expenses, it becomes really hard to determine which funds were used to pay the expenses.
Marital improvement can be described as marital money (money that is obtained by either party during the course of the marriage) is used to improve a non-marital asset. The added value to the non-marital property from the marital funds will make the non-marital property be determined to be marital property.
Active appreciation is when the value of the property increases due to the action of either party during the course of the marriage. One example of active appreciation is when a building is added to real estate during the course of the marriage which leads to a higher value for the property. Another example of active appreciation is when a mutual fund is transferred to another fund during the course if the marriage which leads to a higher value.
It is important to avoid co-mingling, marital improvements, or active appreciation to ensure that your non-marital property stays classified as non-marital
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