Inheritances fall under the property division process during divorce. As a result, divorcing spouses may have questions related to how an inheritance is handled during this process, as well as methods to protect an inherited asset or property from division when a marriage dissolves.
There are generally three categories property is divided into during the property division process. Marital property and separate property are the most common categories but commingled property is another classification that may come up. Marital property is generally subject to the property division process when the couple divorces but separate property is not. Marital property includes property, assets and income acquired during the couple’s marriage.
Separate property is generally not subject to the property division process. It includes property one spouse entered the marriage with, personal injury awards, gifts and generally, any inheritances received. If one of the spouses received an inheritance during the marriage, however, and it is jointly used or used to improve the marital home, for instance, it may be considered a commingled asset and is thus subject to the property division process during divorce. The process of sorting commingled property out can be challenging, so it is helpful for divorcing spouses to understand what they are and how they are treated.
Additionally, how an inheritance is treated during the property division and divorce process can vary by state, so it is also helpful for divorcing spouses to be familiar with the differences and how it is handled where they live and are divorcing. The more divorcing couples know about the property division process beforehand, the better position they will be to protect their interests during it, including protecting an inheritance.