Will I Have to Split My Inheritance if I Get Divorced?

Split My Inheritance if I Get Divorced

Getting divorced can lead to a lot of questions about money. Many people want to protect their assets as much as possible during the divorce, including keeping their hands on as much of the money they have earned or that they received from family members and loved ones as possible. Unfortunately, divorce often involves the division of critical assets.

Does that division apply to an inheritance? How can you protect your inheritance during your divorce?

Division of Assets During a Divorce

During most divorces, you and your spouse will have the opportunity to divide your assets. Most often, the state will assign a 50/50 split on marital assets. In some cases, however, you and your spouse may come to a private agreement based on the division that works best for you. For example, there may be certain assets–a china set that belongs to the wife; an artwork collection carefully curated by the husband–that you have little interest in. You may decide that you don’t want to argue over that specific asset and will hand it over to your spouse without contest.

In most cases, however, inheritances are reflected as cash assets. As a result, you may find yourself in a bitter fight over who gets to keep the money from the inheritance and whether you have to share it with your spouse.

Marital Assets vs. Private Assets

In order to determine whether you will need to split an inheritance, the court will often look at marital assets versus private assets. Marital assets are those assets, including your income while married, that are considered communal property. For example, if you own a home together, you may consider it a marital asset. If you go into the marriage with considerable investments or funds in your savings account, and never put your spouse’s account on those funds, they may not count as marital assets, which means that you can keep them during your divorce. Private assets remain the property of the spouse they belonged to previously and do not have to be split during a divorce.

Does an Inheritance Count as Marital Property?

In order to determine whether an inheritance counts as marital property, and therefore whether you can keep it during the divorce, you may need to assess whether the inheritance counts as marital property.

In many cases, an inheritance is specifically assigned as the property of one spouse. For example, if you received an inheritance from your grandmother, it may go to you directly. That money is not a marital asset, because it was assigned specifically to you in the divorce. On the other hand, if an inheritance is given to you and your spouse, and the wording of the will assigns it to the two of you together, you may need to split that inheritance in the divorce–even if you “just know” that your grandmother would have intended for it to go to you alone if she had known about the divorce.

Likewise, wording may matter in distributing an inheritance that comes after your divorce. In some cases, aging relatives may make provision for your spouse directly in their will, often as a means of ensuring that grandchildren get taken care of. Typically, you will not have to give any funds received after a divorce to your spouse. However, if the deceased’s will deliberately assigns an inheritance to your former spouse, even if names the two of you together, you may both receive half of the inheritance.

Protecting Your Inheritance in a Divorce

Whether you have already received an inheritance or know that you have one coming after your divorce, you may want to take several steps to ensure that you protect the money that is your due as much as possible.

1. Keep inheritance money in a separate account.

If you and your spouse buy something together with the money from the inheritance–a house or car, for example–or move the money into a joint investment account, it may count as a marital asset. On the other hand, if you keep it in a separate account that is assigned to you alone, that money may be considered yours in the divorce.

2. Be prepared to negotiate.

What is it that you want to keep during your divorce? During any divorce, you must be prepared to compromise and negotiate with your former spouse as you decide how to assign assets, including your inheritance. You may need to be willing to offer something else to your spouse in exchange for the assets related to your inheritance.

3. Talk to your attorney.

Inheritance law can prove complex, especially in the midst of a divorce. Talk to your attorney about how assets will be distributed during your divorce and how you want to manage your inheritance. Sometimes, your attorney can offer advice about how to protect your inheritance.

4. Do not attempt to hide assets.

Hiding assets can bring with it substantial legal consequences when you’re in the midst of a divorce. Don’t try to hide the money from your inheritance. You can protect it by placing it in a separate account or keeping it separate from marital funds, but you will need to disclose the amount during your divorce.

5. Talk to your loved ones about their wills.

Talking about a will with your loved ones can seem daunting. However, if you know that your parents, for example, have rewritten their will since your marriage, you may want to remind them to revisit it. They will need to make their own choices about who to include in the inheritance, but you may want to have them designate separate amounts for you and your former spouse or to write your spouse out of the will, if that’s a change that needs to be made.

Protecting your assets in a divorce can feel daunting. Pedrick Law Group, APC can help. Contact us today at  818-325-3934 to learn more about how to protect your assets, including your inheritance, or to get started on your divorce proceedings.

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