When two people divorce, questions sometimes come up as to whether one party may claim rights to another party's inheritance funds acquired during the marriage. Let's say, for example, your great aunt dies and leaves you the assets to her estate in her will, with no mention of your spouse (although she knew you were married). This is considered an inheritance acquired during the marriage, and what you do with the assets upon receipt may influence whether you'll have to part with a portion of those assets upon divorce.
Inheritance During Marriage: Basics
Generally, inheritances are not subject to equitable distribution because, by law, inheritances are not considered marital property. Instead, inheritances are treated as separate property belonging to the person who received the inheritance, and therefore may not be divided between the parties in a divorce.
However, state laws determine how an inheritance is treated once it's shared, and the rules 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 loses its immunity. Likewise, if the inheritance is used to make improvements to the primary residence, it may also lose its immunity.
Therefore, comingling is key -- if separate property is used in a way that benefits joint marital assets, the inheritance is no longer considered separate property, and may be subject to division upon divorce.
What about an inheritance that was acquired before the marriage? Isn't that my separate property?
Oftentimes spouses will enter into a marriage with some prior wealth of their own, whether by inheritance or otherwise. State laws determine how an inheritance acquired before the marriage might be treated in the event of a divorce. Again, if the inherited funds are deposited into a joint account, or if marital funds are deposit into an inheritance account -- then comingling has occurred. Otherwise, the inheritance is considered separate property and the person who received it may keep all the funds associated with it.
Sometimes the best way to safeguard pre-marital assets is to find out how a prenuptial agreement may help you and determine what can (and can't) be included in prenuptial agreements, including a future inheritance.
What if I 'comingled' the funds, but never intended to share the inheritance with my spouse? May I still prevent my future ex-spouse from getting half of my inheritance?
While the general rule is that the comingling of funds converts the assets into marital property, some courts hold that only a portion, or none, of the comingled funds may remain separate property IF the party can demonstrate that the funds were never intended to be shared. However, there is a very high burden of proof contesting the presumption of shared funds. Therefore, a person seeking to contest the sharing of an inheritance will probably need the advice of an experienced family law attorney in your area who can best handle these types of issues.
Getting Legal Help Understanding Inheritance and Divorce
Inheritance laws can be convoluted and frankly tough to understand, especially in the context of a divorce. If you would like to know more about how a divorce will affect your inheritance, you may want to contact a skilled divorce attorney near you to discuss your specific situation.