When a person inherits a significant amount of money or property, they may be concerned about how those assets will be treated in the event of a divorce. Many people wonder if inherited assets must be split between the parties, and if there are ways to protect those assets so that they are not considered marital property. In this article, we will discuss how inheritance is treated in a divorce, and what steps can be taken to protect inherited assets.

What is Considered Marital Property in a Divorce?

In a divorce, all assets and debts that were acquired during the marriage are considered marital property and must be divided between the parties. This includes income earned during the marriage, property purchased during the marriage, and any increase in value of property owned prior to the marriage.

However, there are certain assets that are not considered marital property and are not subject to division in a divorce. These include assets that were acquired prior to the marriage, gifts given to one party during the marriage, and inheritances received by one party during the marriage.

How is Inheritance Treated in a Divorce?

Inherited assets, or assets received by one party as a result of a will or trust, are typically considered separate property and are not subject to division in a divorce. This means that if one party inherits a significant amount of money or property during the marriage, that inheritance is not considered marital property and cannot be divided between the parties in a divorce.

However, it is important to note that if the inherited assets are commingled with marital assets, they may lose their separate property status and become subject to division in a divorce. For example, if a party inherits money and deposits it into a joint bank account, that money may lose its separate property status and become marital property subject to division.

Protecting Inherited Assets in a Divorce

To ensure that inherited assets are protected in a divorce, it is important to keep them separate from marital assets. This can be done by keeping inherited assets in a separate bank account or investment account, and not using them for marital expenses. Additionally, it may be helpful to document the inheritance, such as by keeping a copy of the will or trust, to prove that the assets were inherited and are separate property.

It’s also important to note that a prenuptial agreement can also be a way to protect inherited assets in a divorce. A prenuptial agreement is a legal contract entered into prior to marriage, which sets out how assets will be divided in the event of a divorce. It is important to consult with a lawyer to ensure that the prenuptial agreement is valid and enforceable.

Conclusion

Inherited assets are typically considered separate property and are not subject to division in a divorce. However, if inherited assets are commingled with marital assets, they may lose their separate property status and become subject to division. To protect inherited assets in a divorce, it is important to keep them separate from marital assets and document the inheritance. A prenuptial agreement can also be a way to protect inherited assets in a divorce.

It’s important to consult with a family law attorney who can advise you on the laws specific to your state and jurisdiction. They can help you understand your rights and obligations regarding inherited assets in a divorce and help you take steps to protect those assets. This will help ensure that your inherited assets are protected in the event of a divorce, and that you are able to keep what is rightfully yours. We proudly serve clients throughout the Chicagoland area, including Cook County, Lake County, and McHenry County. Call our office to schedule a complimentary consultation.