During your marriage, it’s safe to assume that you make a variety of important financial decisions alongside your spouse. While this is commonplace, every move you make will impact you in the event of a future divorce, so tread carefully.
Sometimes, there is more to property division than meets the eye. For example, you may be familiar with the fact that your home, cars and bank accounts will be subject to division. However, there are times when other assets move to the forefront.
How Are Inheritances Treated?
Generally speaking, an inheritance is not subject to equitable distribution in the event of a divorce. The reason for this is simple: This is not considered maritial property by law. Inheritances are considered separate property belonging to the person who received the inheritance. With this in mind, it does not typically come into play during a divorce and property division.
Commingling Assets Can Complicate Property Division
Commingling has a way of complicating things. This comes into play if the inherited property goes to use in a way that benefits both parties. An example of this would be a person who inherited a large sum of cash from a family member. From there, the couple uses the money to purchase a family home in both individuals’ names. At that point, the property is no longer considered separate. Instead it is marital property and subject to equitable division during a divorce.
With all this in mind, it’s important for anyone who receives an inheritance to realize the impact it can have on the future. If you find yourself in this position, if you have any reason to believe that you may divorce in the future, it’s best to keep the property separate for the time being.
There is no easy way to prepare for divorce. Even if you think you know what you’re doing, there will be times when you run into a challenge or complication that has you searching for answers.
If you have received an inheritance in the past or are in line to receive one in the future, be sure to consider what will happen to this if you ever go through a divorce. It’s better to plan for everything up front than to face trouble in the future.