Inheritance and Divorce

When two people divorce, a dispute may come up as to whether one spouse may claim rights to another spouse's inheritance acquired during the marriage. During the marriage, one spouse may inherit money or property. Even with an inheritance before a marriage, inherited money can later get mixed with other marital assets. This article addresses some of the common legal situations that arise regarding inheritance and divorce.

Inheritance During Marriage: Basics

In a divorce, marital property is divided between the separating spouses. Generally, inheritances are not subject to equitable distribution because inheritances are not considered marital property. Instead, inheritances are treated as separate property belonging to the person who received the inheritance and are not be divided between the parties in a divorce.

However, if an inheritance is shared between spouses, it can be treated differently based on rules that vary greatly among the states. For instance, if the inheritance is deposited into a joint bank account and used for joint marital expenses (called "comingling of the inheritance"), the inheritance can lose its status as separate property. Likewise, if the inheritance is used to make improvements to the primary residence, it may also lose its separate status.

If separate property is used in a way that benefits joint marital assets, the inheritance may no longer be considered separate property. If it is no longer separate property, it may be subject to division upon divorce.

Inheritance Acquired Before the Marriage

There are times when spouses enter into a marriage with some prior wealth of their own from an inheritance. State laws determine how an inheritance acquired before the marriage might be treated in the event of a divorce.

If the property is kept separate, under a separate title, or in a separate account, the property should continue to maintain separation. Without comingling, the inheritance would normally be considered separate property and the person who received it may keep all the funds associated with it in the event of a divorce.

Sometimes the best way to safeguard pre-marital assets is to enter into a prenuptial agreement and clearly identify ownership of any pre-marital assets and how a couple would treat any future inheritance.

Gifts During the Marriage

Gifts given to one spouse during the marriage are generally treated in the same way as an inheritance. If a third party gives a gift to only one spouse, the spouse maintains the gift as separate property in a divorce. However, like inheritance, if the gift is commingled with joint assets, it may lose separate property status and be subject to distribution in a divorce.

When Is Inheritance Separate Property?

Whether or not a gift or inheritance is separate or shared is very fact-specific. Different courts may treat inheritance and gifts differently in different situations. If you are concerned about inherited property in a divorce, get the advice of an experienced family law attorney in your area.

Get Legal Help Working Through Inheritance and Divorce Issues

Inheritance laws can be tough to understand, especially in the context of a divorce. If you would like to know more about inheritance and divorce, you may want to contact a skilled divorce attorney near you to discuss your specific situation.