When you get divorced, you and your spouse must either work together to divide your marital assets or a judge will make a determination as to how your marital estate will be split. Generally, this just means the things that the two of you acquired together, such as a home you purchased or money you put in a joint bank account from your monthly income must be divided one way or another.
Couples who have been married for years may own a great deal of property that is likely to be classified as marital assets. But what about an inheritance that you were given from a family member who passed away? This can often be a very significant kind of asset, especially for young couples who haven’t had as long to accumulate their own assets. That inheritance could be the most valuable account that you have. If you’re divorcing, you may think that you get to keep this entire inheritance for yourself. Must you split its value with your spouse?
Did you commingle your inheritance?
Regardless of when you received the inheritance, it will likely be considered a separate asset initially. Other assets that you and your spouse acquire after getting married typically count as shared assets, meaning you must divide them. But an inheritance is different if it was gifted directly to one individual by their parents or another extended family member. It starts as a separate asset, and that individual can do with it as they chose.
However, you can change the status of an inheritance by commingling it – or mixing it – with your other assets. Commingling can be done internationally or accidentally, but it is very common with married couples who tend to share their assets and finances. An example of this would be if you simply keep your inheritance in a shared account. You may have just deposited it in your joint checking account, for instance, that both of you can access. You may also have used it as a down payment on a house or as a way to buy a different shared asset. If you did so, it may mean that you do have to split the value of the inheritance – or, at least part of its value – with your spouse because they benefited from that asset during the marriage.
What are your options?
You can imagine how complicated this type of situation can become. Be sure you know about all the legal options at your disposal, if you’re divorcing and you’re concerned about preserving the value of an inheritance. Seeking legal guidance is a good place to start.
