Divorce Inheritance Money Advice
If you've received inheritance money, you may wonder what will happen to the cash a loved one bequeathed to you should you and your spouse ultimately divorce. Characterizing your inheritance money as your separate property involves taking diligent steps so that it remains separate for the duration of your marriage.
Other People Are Reading
-
What Is Separate Property?
-
To understand how inheritance money is classified during the course of a divorce proceeding, it's important to know the nature of what is typically considered property that belongs to the couple jointly. Community property is defined as any asset that a couple acquires after marriage through their respective wages, any dividends or interest on community property (such as stocks and bonds, or interest that accrues on a savings account or certificate of deposit), as well as dividends and interest earned on a spouse's separate income, but not the separate property itself.
However, there are certain exceptions to what is considered community property. During a divorce proceeding, the couple's separate property must be identified so that it is not considered part of the marital estate to be divided. Separate property includes all property each spouse had before the marriage (including money), gifts made expressly to an individual and damages awarded to one spouse as a result of a personal injury suit. Inheritance money is also considered separate property if it is awarded to one spouse only, and even if it was bequeathed to both spouses jointly.
Inheritance Money and Community Property
-
Community property states make the assumption that all property acquired after the marriage is community property. When separate property, such as inheritance money, and community property funds are commingled in the same account, this could lead to future problems should you and your spouse divorce. It can be extremely difficult to get your inheritance money back unless you can account for where it was spent. You may even require the services of a forensic accountant, who can trace your purchases back to their respective resource.
-
Keeping Inheritance Separate
-
The only way to make sure that inheritance money remains separate property is to keep it in a separate account. During a divorce, it will be very difficult to prove that your inheritance money is yours if it's commingled with community property money. Even if you don't think that a divorce will be in your future, there are other reasons to keep your inheritance money separate--to respect the wishes of the person who bequeathed it solely to you.
-
