When it comes to divorce, the division of the marital property can get contentious — especially when there’s a lot at stake.
Technically, your inheritance is usually supposed to stay with you, even if you and your spouse get divorced. It’s not a traditional marital asset that’s automatically subject to division. However, there are situations where you may have to share some of that wealth with a spouse in a divorce.
For example, if you deposit your inheritance into a joint bank account and give your spouse access to that money, it may then become marital property that’s subject to division because inheritances only remain one party’s separate property so long as it doesn’t accidentally or intentionally end up co-mingled with other funds. It’s also possible that you could owe your spouse a share of any interest you’ve earned on your inheritance. That could be significant if the money is placed in some kind of investment account.
How do you protect yourself? Experts say that the best way to keep an inheritance yours is through a combination of trusts and premarital (or postmarital) agreements. A trust can help you keep the funds from being co-mingled, while a premarital or postmarital agreement can effectively limit your spouse’s ability to later claim any interest from the money. You might also be able to carve out an agreement that protects property purchased with the inheritance — like a second home or a boat.
Protecting your assets isn’t easy. If you’re unsure about the steps you should take, it may be time to talk to an experienced advocate about all of your options. Prenuptial and postnuptial agreements are often part of good planning.