Commingling Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Commingling, written in plain English, along with examples of how it is used.

What is Commingling?

History and Meaning of Commingling

Commingling is an illegal act of mixing funds belonging to one party with those of another. The person doing this is usually responsible for the management of the funds and benefits personally from the mix-up. Examples of people who are not allowed to commingle funds include trustees, guardians, or lawyers managing someone's funds. However, spouses and business partners can commingle funds under certain circumstances.

Commingling is considered unethical and illegal because it can lead to fraud or embezzlement. It makes it difficult to track the flow of funds and can misrepresent the actual financial position of a company or individual.

Examples of Commingling

Commingling can take many forms, but here are a few examples:

• A financial advisor mixing clients' assets in a single account for their benefit.
• An employee using their company's petty cash to pay personal expenses.
• A trustee of a trust using the trust's funds for their personal expenses.
• A real estate agent commingling client deposits with their own funds.

Legal Terms Similar to Commingling

Here are some legal terms similar to commingling:

• Embezzlement: The act of fraudulently misappropriating or stealing funds entrusted to one's care.
• Co-mingled accounts: Accounts that hold multiple clients' funds in a single account.
• Trust accounting: Accounting and management of funds held in trust for the benefit of another.