How to Deal with Inheritance in a Divorce
By Henry F. Lewis on August 30, 2018
When a couple divorces, there are often many emotions involved. During this tumultuous time, it can be difficult to think logically, which is vital to handling the more mechanical aspects of a divorce, such as the division of assets.
It is important for those seeking a divorce to work with an experienced divorce lawyer, such as those at Gardner & Lewis, LLP, who will guide them through the divorce process and work hard to reach a settlement that is favorable to all involved parties.
Often, divorce involves the division of complex assets, such as inheritance. Our attorneys have a great deal of experience settling matters of divorce and inheritance in the Oakland, CA area. We will consider all financial holdings in a marriage, including inheritance, to ensure our clients walk away from a divorce with the assets they are due.
Who Has a Right to Inheritance after a Divorce?
An inheritance is considered a complex asset in divorce, meaning that it is not typically a liquid asset that can be easily divided. When considering how (or if) an inheritance will be divided after a divorce, we must look into several different factors; mainly, who received the inheritance, when it was received, and if it has already been placed into a joint account.
In general, an inheritance is not considered joint property. If one spouse receives an inheritance that is in his or her name alone, that should be considered separate property. As separate property, an inheritance is not likely to be subject to division in a divorce.
However, there are some exceptions to this general rule. In any of the following situations, both spouses may be due at least partial assets from the inheritance:
- If an inheritance is received while a couple is married, and the money is placed into a shared financial account, it has become comingled. Once assets are comingled, it is likely that the court will rule in favor of having the assets divided between the spouses.
- Even if an inheritance is received prior to a marriage, it may be subject to division. In these cases, the division of property will again come down to comingling. If the inheritance has remained separate, it will be considered separate property and remain entirely in the name of the spouse who received the inheritance. However, if the funds were placed into a joint account, or used in a way that benefited both spouses (such as home improvements), comingling has occurred and the inheritance may be divided.
- If any portion of an inheritance is intentionally gifted to your spouse, in a transaction known as transmutation, that portion of the inheritance is no longer protected from the division of assets.
Protecting an Inheritance
Whether an inheritance is received prior to or during a marriage, the best way to protect it is to keep all the assets of that inheritance completely separate. Money should be kept in a separate financial account under the name of the spouse who received the inheritance.
In the event that property is inherited, it is important to consider how that property will be used. If spouses or a family move into that property together, it will likely be considered shared property in the event of a divorce.
If an inheritance has been comingled, the best hope of maintaining full control of the inheritance after the divorce is to have your spouse sign a postnuptial agreement, which releases all claims to the inheritance. Without this paperwork, it may be a battle to protect inheritance assets that have already been comingled.
The experienced attorneys at Gardner & Lewis, LLP can go over the specific details of each client’s situation.
The division of assets in a divorce can be extremely complex. To ensure that you settle a divorce fairly and walk away with the assets you are due, it is important to work with an experienced divorce lawyer, such as those at Gardner & Lewis, LLP. To learn more about how we can be of assistance to you throughout your divorce proceedings, contact us at your earliest convenience.
Related to This
“The needs of your family are always at the forefront of our legal services. Whether through litigation or mediation, we believe that reaching a fair, efficient solution with minimal negative impact to your family is of the utmost importance.” Henry F. Lewis