If you receive an inheritance while you are married, it is generally up to you whether you want to keep the money separate or share it with your spouse. However, if you do not choose to keep it completely separate, you could find yourself splitting it down the middle in the case of divorce.
The law states that an inheritance is solely the property of the party who received it, and that they are under no obligation to share with their spouse. Thus, whether you receive an inheritance before or during marriage, you will usually not be required to share it with your spouse in the event of a divorce.
However, there are circumstances in which this will not be the case. If you decide to “share” your inheritance and commingle, it will change its nature and turn it into marital property, which is subject to equitable division.
If you want to avoid this, here are several tips on avoiding commingling your property:
– Deposit your inheritance in a separate account and use its funds for expenses unrelated to your spouse and marriage.
– Do not deposit the inheritance money into a joint account, retirement fund, 401(k) plan, etc.
– Do not purchase joint property or property intended to be used as marital property.
– The burden of proving that there was no intent to share the inheritance is on the spouse who received it, so if want it to remain separate in the eyes of the law, do not commingle it in any way!
Many people follow up these tips on asking whether it is “selfish” or “ethical” to not share an inheritance with your spouse. The answer to that question depends on you, but there is a way to share without being legally obliged to share half in the event of divorce.
Consider this scenario: you inherit $100,000 and wish to contribute $20,000 to the marriage for the marital home, or toward a pension plan. In this situation, do not place the entire sum in your account. Instead, place the inheritance in a separate bank account, and write a check for $20k detailing what it is being used for. If you keep meticulous records, document your actions, and don’t commingle your separate property, you should generally be able to walk away with your separate inherited property intact after a divorce.