Most property that people acquire during marriage is vulnerable when they divorce. Even in cases where one spouse works full-time and the other has a minimum wage, part-time job, they typically both have a right to the income and assets accumulated during the marriage.
Property division proceedings can be very stressful for those who have valuable assets in their names. However, there are certain resources that people can potentially exclude from the asset distribution process. An inheritance is one of the few assets specifically designated as separate property under state law.
How can someone who inherited valuable resources protect those assets as they begin preparing for divorce?
Review financial records
The spouse left assets by a loved one typically enjoys sole ownership and control of those assets even if the inheritance passes to them during the marriage. However, people can make mistakes with inherited property that can put it at risk.
Commingling is a common mistake. Sometimes, people deposit a financial inheritance into a shared bank account. Other times, they execute documents to add their spouse as a co-owner of their inherited property. In those scenarios, those assets may be at least partially vulnerable to division. Conducting a thorough financial review is one of the best ways to establish whether commingling occurred and to identify separate inherited property to exclude it from the pool of marital resources.
Communicate about the inheritance
People can sometimes forget that certain resources don’t belong to the couple but rather only to one spouse. It is sometimes helpful to communicate the intent to preserve inherited resources as separate property early in divorce negotiations. One spouse may willingly concede that they do not have a right to claim inherited property. They may even agree to set it aside in cases involving commingling sometimes.
If the non-inheriting spouse wants to lay claim to inherited property, working toward an amicable divorce resolution may be the best option available. People can frequently preserve inherited property through an uncontested divorce. By agreeing to terms that their spouse finds agreeable in other aspects of property division, they can preserve their inherited assets.
Those worried about preserving an inheritance when dividing marital property during a divorce may need help putting together a viable strategy. Learning more about state law and reviewing marital finances are both important steps for divorcing individuals who want to protect what they’ve inherited.