Yahoo Finance reported in 2022 the average inheritance for Americans was $46,200. Despite the amount of inheritance you receive, the chances are good that you want to keep it for yourself in a divorce.
In general, inheritances have protection from asset division, but you must take certain steps to safeguard it and avoid the court considering it as marital property.
Proper documentation
Ensure that you have clear, documented evidence of your inheritance. This might include wills, trust documents or any other legal paperwork that demonstrates the origin and ownership of the inherited assets.
Keep meticulous records of any financial transactions involving your inherited assets. This can help prove their separate nature during divorce proceedings.
Separate accounts
It is wise to maintain a distinct account for your inherited assets. Keep this account separate from your joint accounts to prevent any commingling of funds, which could make it more challenging to prove that the assets are non-marital property.
Consistent management
Continue managing your inherited assets in a consistent manner. Avoid using them for joint expenses or contributing them to joint investments, as this can blur the line between separate and marital property.
Pre- or post-marital agreement
If you anticipate receiving a substantial inheritance or have already received one, consider entering into a prenuptial or postnuptial agreement with your spouse. Such an agreement can specify that the inherited assets remain your separate property.
Avoid using inheritance for joint expenses
Refrain from using your inherited assets to pay for joint expenses like the mortgage, bills or vacations. When you use inherited funds for shared costs, it can be challenging to prove that they should be separate property. If you use your inherited assets to improve marital property, document these enhancements.
Following these steps can help you to retain your inheritance in a divorce. However, keep in mind that it may come down to a judge’s decision if you and your spouse cannot agree outside of court.
