December 5, 2019
Your inheritance is a big part of your overall wealth. Your parents left you nearly $1 million when they passed away. That was not even 12 months ago. You already understand the ways that this money can change your life. You have not done anything with it yet, but you plan to.
Now your spouse has asked for a divorce, and they told you they want “their” $500,000. They also had ideas for how the money could change their future. They do not want to give that up. They claim your parents gave the money to both of you and they still want their half.
Do you owe them that money? Will your inheritance get divided? Does your ex have a point?
Probably not. In most cases, an inheritance is considered separate property, not marital property. This means it does not need to get divided. The property division rules do not apply to that money. The $1 million belongs to you and you alone. Your spouse can have all the plans they want for “their” $500,000, but your parents left that money to you and not your ex. They have no claim.
The idea behind these laws is that gifts, like an inheritance, generally focus on one individual. The person gifting the money or assets did not intend for it to go to anyone else. Giving it to an ex would be a disservice to that person and would undermine their intentions.
To some degree, it’s also about keeping those assets in the family. Maybe your grandparents passed some of the money on to your parents. They in turn passed it on to you. That’s family money. Your ex married into the family but then chose to leave. They are not actually related. Giving the money to them removes it from the family.
One main exception does exist. Commingled assets become marital property. If you mixed that inheritance with the rest of your family assets, your ex may then claim that you gave them access to it and turned it into a marital asset. They could have a claim to it.
A common way to commingle an asset is to put it into an account with other marital assets. For instance, maybe the two of you have a joint bank account that you pay the bills with. If you put the inheritance in a personal account, it stays separate. If you put it into the joint account, it can become a shared asset.
When divorce strikes, financial questions abound. Make sure you know what options you have, what rights you have, what state-level divorce laws you need to follow and exactly what to do with your assets.