When you and your spouse decide to file for divorce, both parties will eventually receive their fair share of any assets left after the dissolution of the marriage. If you have recently received a large inheritance from a friend or relative, this is not necessarily treated as marriage property. In fact, you may be able to keep a sizable sum of the money you were give, depending on how much time has passed since the inheritance occurred.
Marital vs. Separate Property
Marital property is property that was gained by the couple during their marriage. This could be a house, cars, bank accounts or gifts that the couple received over the years. Separate property is property each party brought to the marriage, or property specifically given to one party as part of inheritance or gift. What gets confusing is that one party could own a house prior to the marriage. The couple marries and the party adds the second party to the deed of the home. This is a gift from one party to the other, which will then make the house part of the marital property. Anything one party gives to the other during their marriage will be considered marital property.
Inheritances are Handled with Care
If you receive a large inheritance, your intentions for this money will determine how it is divided if a divorce is filed. If the money is kept in a separate account, with just your name on it, you have made it clear that you are not intending to share the money with your spouse. Putting the funds into a shared bank account tells the court that you are planning to share the money with your spouse. If you inherit property, keeping just your name on the deed will ensure that the home is yours and considered separate property.
Dividing assets at the time of a divorce can get complicated. It is marital property that is divided at the time of the divorce. Depending on the state in which you live, marital property is divided by either equitable distribution or community property distribution guidelines. Equitable distribution separates marriage property by what is deemed fair to both parties, while community property distribution divides everything in half.
An inheritance that is received years before a divorce is filed may be considered marital property. While the guidelines vary from state to state, generally when the inheritance was over ten years ago, both parties may be entitled to half of the money. If the number of years since the inheritance is significantly less, the inheriting party will receive a higher percentage.
The bottom line is, if you are in the midst of a divorce and you inherited a lot of money, you need to meet with a qualified divorce attorney to discuss your case.Share