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circumstances, the law usually presumes that any gains run to the client and any losses run to the fiduciary who is guilty of commingling. As one source puts it, "n a pejorative sense, commingling is the special vice of fiduciaries (trustee, agents, lawyers, etc.) in failing to keep a beneficiary's money separate from the fiduciary's own money".
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of the fiduciary. Funds held in care are not the fiduciary's property, and the client is not a creditor. So in case of bankruptcy, if the funds have been properly kept separate, they can easily be returned to the client. If, however, the funds have been commingled, the client is potentially subject
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mixes funds held in care for a client with his own funds, making it difficult to determine which funds belong to the fiduciary and which belong to the client. This raises particular concerns where the funds are invested, and gains or losses from the investments must be allocated. In such
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For example, a tenant who deposits money with a landlord has not lent money to the landlord – the tenant is not a creditor – and is entitled to his deposit back even in case that the landlord declares bankruptcy, assuming property is in good condition – the tenant is responsible for the
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Similarly, a client who invests with a fund or broker is investing, not lending, so the fiduciary must keep the client money separate and not use it for their own purposes, but only for approved investment purposes: the client is subject to
141:" of a sham corporation, where a person shields himself from personal liability through "incorporation", yet fails to observe strict separation of corporate and personal property or accounts, among other improprieties.
164:, "commingling" non-marital property with marital property can make it community property. For example, depositing money received by an individual through
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is on the party disputing the classification to "trace" the property back to individual property, and demonstrate an intent to keep it separated.
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to becoming entangled in the bankruptcy proceedings, and there may not be sufficient funds to pay the client back.
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are strictly prohibited from commingling their clients' funds with their own, and such activity is grounds for
148:, strict separation of corporate and personal property is a particular issue, notably in tax and divorce law.
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Breach of trust in which a fiduciary mixes funds held in care for a client with their own funds
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may transform the money into community property. Most community property states apply a
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This article is about the commingling of money. For the usage in computer science, see
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The problem of commingling is of particular concern in the legal profession.
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and the difficulty of detection. Similar rules apply for licensed
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and other professionals who hold deposits as agents for clients
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risk on his money, but not credit risk regarding the fiduciary.
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of community property; where there is any commingling the
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in virtually every jurisdiction, because of the ease of
137:Commingling is also evidence that may be used in "
236:Banking Law in the United States - Fourth Edition
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57:Commingling is particularly an issue in case of
210:Mellinkoff's Dictionary of American Legal Usage
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234:Alfred M. Pollard and Joseph P. Daly,
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262:Principles of Real Estate Practice
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273:William H. Pivar, Robert Bruss,
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249:Practical Law Office Management
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223:The Language of Real Estate
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139:piercing the corporate veil
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275:California Real Estate Law
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247:Cynthia Traina Donnes,
238:(2014), 14-58 to 14-59.
80:but is not undertaking
36:single-stream recycling
26:For the commingling of
119:real estate brokers
101:Lawyers and brokers
208:David Mellinkoff,
158:community property
152:Community property
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174:presumption
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127:in absentia
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28:recyclables
196:References
111:disbarment
95:investment
59:bankruptcy
121:handling
107:Attorneys
78:property,
51:fiduciary
32:recycling
288:Category
184:See also
66:Examples
41:In law,
190:Escrow
30:, see
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