Is Your Inheritance Up for Grabs During Your Divorce?
When a divorce is pending, spouses begin thinking about dividing their property and assets, including bank accounts, real estate, and personal possessions. One matter that comes to mind is the protection of an inheritance. This is commonly a big worry when the inheritance includes a family heirloom or a significant amount of money.
If you have inherited sizeable assets or family heirlooms, you may want to speak to an experienced attorney to find out what is rightfully yours to keep. Whether or not you may keep your inheritance, rather than divide it with a spouse, may depend on several factors, including how the property is classified.
Marital or Non-Marital Property
If there is an issue with gifts and inheritance during a divorce, it is vital that you know the difference between non-marital and marital property. Non-marital property is distinctly the possession of one spouse, and has at least one of the following characteristics:
- The property was owned by one spouse prior to the marriage.
- The property was given to one spouse by a member of his or her family as a gift or inheritance.
- The property was a gift to one spouse only by a third party.
- The property was designated through a prenuptial or postnuptial agreement as separate property.
To be considered non-marital property belonging to only one spouse, the property in question must meet at least one of the conditions above, in combination with being solely in the possession of that spouse. If it does not meet any of the conditions, it will be labeled marital property and may be subject to division.
Even property that is considered non-marital property can become marital property under certain circumstances. Therefore, it is important to shield your inheritance unless you are certain that you will never need to prove it belongs to you only. If you fail to protect your inheritance, your spouse may be open to questioning the ownership of the property.
How to Protect Your Inheritance
Laws in all 50 states protect inheritance. They declare that a spouse has no right to their spouse’s inheritance either during or after the marriage. However, it is easy to undo the protection these laws provide if you do not handle your inheritance appropriately. To safeguard your inheritance, follow these rules:
- Commingling: When you combine your inheritance with any of your marital assets, the protection becomes null and void, and your inherited property may be subject to division. It is important to keep your inheritance separate from your marital accounts. Be sure the account is in your name only and does not include your spouse’s.
- Non-monetary contributions: If your spouse makes non-monetary contributions to your inherited asset, it can leave your inheritance unprotected during the divorce. For example, if your spouse uses his or her tools and time to do needed repairs on your inherited property, he or she may be entitled to a portion of your inheritance. If your property needs repairs, it is recommended that you hire someone to do them, but do not use marital funds to pay for them. That puts the inheritance at risk.
- Source of funds: Be careful how you invest to improve or repair property that was inherited by you or gifted solely to you. The income that you earn during marriage is marital property. If you use marital funds to repair property that you inherited or that was gifted solely to you, that inheritance or gift may then be subject to division during a divorce.
Defense for Your Inheritance
During a divorce dispute, if you have broken the rules above or your inheritance is in question for any reason, you will have to prove to the court that the inheritance was intended to be separate. That is why it is important to have an attorney who knows how to handle cases just like yours. The attorneys at Stearns-Montgomery & Proctor have the knowledge and experience to make sure your inheritance remain yours.