Phone : 610-674-1554

Do you need to divide an inheritance during your divorce?

On Behalf of | Jul 22, 2024 | Property Division

Getting divorced means that it is time for you and your partner to split up your assets. Generally, you need to divide marital assets that you acquired during the relationship, but you each get to keep separate assets that you owned before that relationship. In some cases, gifts that are given directly to you, even if you’re already married, still count as separate assets.

Often, an inheritance is an example of one of these gifts. If your parents gave you a $100,000 inheritance in their estate plan, for instance, your spouse may not initially have any ownership rights. Many other assets that you acquire during your marriage are jointly owned – the family home, etc – but an inheritance that is given directly to you from your own parents counts as a separate asset. This keeps the money in your family.

Commingling your inheritance

Depending on what you did next with the inheritance, it may still be a separate asset. Maybe you just opened a bank account in your own name and deposited the money, and you haven’t touched it since. It is probably still a separate asset and that doesn’t have to go through property division. You are still the account owner and your spouse doesn’t have a right to the money.

But if you mixed that inheritance together with other assets that you and your spouse own, this is known as commingling. Doing so turns your inheritance into a marital asset. 

For instance, perhaps you and your spouse already had an investment portfolio that you were using to save for retirement. If you deposited the inheritance into that account, it has been commingled and you can’t simply withdraw the $100,000 and keep it yourself. Your spouse does have a right to at least a portion of the account.

You can see how an inheritance can make a divorce very complicated from a financial perspective. Take the time to carefully consider your legal options.

 

Practice Areas

Family Law

Discover More

Estate Planning & Administration

Discover More

Tax Representation & Litigation

Discover More