I Received an Inheritance, What Happens if I Get a Divorce?
In a divorce, questions may arise as to whether a spouse can claim rights to an inheritance acquired by the other party during the marriage. While marital property is subject to equitable distribution under Florida law, inheritances are generally not considered marital property. Nonetheless, resolving issues over the division of marital property requires the advice of a skilled divorce attorney.
What is equitable distribution?
Under the state’s equitable distribution laws, a couple’s marital property must be divided fairly, but this does not mean equally. Marital property includes:
- Property that was purchased by either spouse during the marriage, regardless of how title is held
- Property that was acquired by the couple jointly while they were married, such as a house or car
- The income of each spouse during marriage
- Retirement benefits earned by either spouse during the marriage
Each spouse is allowed to retain his or her own personal, or separate property, however. This includes property that was acquired by either spouse before the marriage, compensation from a legal settlement, or property under a valid prenuptial agreement. Moreover, inheritances received prior to the marriage or during the marriage are generally considered separate property.
Inheritance During Marriage
Under Florida law, property that was received individually through an inheritance or gift is not subject to equitable distribution. But a lot depends on the how the property was subsequently handled. In fact, there are circumstances in which an inheritance may lose its “immunity” from equitable distribution laws.
If the inheritance was deposited into a joint bank account or used for the couple’s expenses, for example, it may be considered marital property. Similarly, if the inheritance is used to make joint purchases or for improvements to the couple’s primary residence, it may also be subject to equitable distribution.
In short, when separate property, including inheritances, is used is a way that benefits the couple’s marital assets, it is said to be “commingled.” Therefore, the inheritance loses its non-marital designation and becomes transformed into marital property. The same applies to an inheritance that was received prior to the marriage – it is considered separate property, unless commingling has occurred.
One way to shield separate property, inheritances, and other assets acquired during a marriage is through a well designed prenuptial agreement. Otherwise, in the event that an inheritance is commingled, the courts may determine those proceeds are marital property. Ultimately, determining how to divide marital property and protect an inheritance requires proper legal representation. If you are considering a divorce, call Blair H. Chan III, PLLC today.