Inheritance and Divorce

When two people divorce, questions sometimes come up as to whether one spouse may claim rights to another spouse's inheritance funds acquired during the marriage. An inheritance can occur during the marriage, but it can also happen before a marriage and get mixed in with other marital assets. This article addresses some of the common legal situations that arise regarding inheritance and 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, if it's shared between spouses, an inheritance 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 separate property status. Likewise, if the inheritance is used to make improvements to the primary residence, it may also lose its separate status.

Therefore, comingling is key -- if separate property is used in a way that benefits joint marital assets, the inheritance may no longer be considered separate property, and 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, 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. Absent 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, especially if they are substantial, is to enter into a prenuptial agreement clearly identifying ownership of any pre-marital assets and how a couple would treat any future inheritance.

Comingling Inheritance and Divorce

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.

Get Legal Help Working Through Inheritance and Divorce Issues

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 inheritance and divorce, you may want to contact a skilled divorce attorney near you to discuss your specific situation.

Next Steps

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