For some wealthy couples, a substantial portion of that wealth comes from a family inheritance. Wealth is being passed down through the generations, and a person’s parents or grandparents may have left them a significant inheritance in their estate plan.
Often, when a person receives this inheritance, the law classifies it as a separate asset. This is certainly true if they receive it before they get married and then bring that wealth into the marriage. But it can also be true even after they have gotten married if their parents gift the money directly to them.
So what does this mean for property division during a divorce? Will the inheritance have to be divided with that person’s former spouse, or can they keep the entire amount themselves?
Commingling the inheritance
Often, it just depends on how the inheritance was handled by the couple after it was received.
When a person keeps their inheritance separate, such as by storing it in a personal bank account, it often retains its status as a separate asset. It does not have to go through property division, and they simply take it with them as the marriage ends.
But if they commingle that inheritance, mixing it together with other family funds or giving their spouse access to the money and allowing them to use it, this can turn it into a marital asset. Both people had an expectation that they could benefit from it and owned it jointly. That means it usually does have to go through property division.
Often, during a divorce, couples find themselves in a dispute over whether an asset counts as a marital asset or a separate asset. It can be complicated to resolve these disputes and address property division, and it is important for them to know what legal steps to take.