Which of the following describes commingling?

Commingling refers specifically to the process of mixing marital and separate funds together, making it difficult to distinguish which funds belong to which category. When separate property—those assets owned by one spouse prior to marriage or received as a gift or inheritance during the marriage—is combined with marital property, it can lose its original designation. This can have significant implications during the division of assets in a divorce, as it complicates the identification and valuation of separate versus marital property. Option B accurately captures this definition of commingling, highlighting the issue that arises when personal and joint financial resources are intermixed, leading to potential disputes over asset ownership in divorce proceedings.

The other options do not accurately describe commingling. The separation of marital and separate funds discusses the act of keeping these categories distinct, which is the opposite of commingling. The designation of assets in a divorce settlement and the allocation of debts between spouses focus on the distribution and management of assets and liabilities rather than the act of mixing different types of financial properties.