Atlanta Estate Planning, Wills & Probate | Siedentopf Law

Is your Inheritance Protected in the Event of Divorce?

A big Thank You to our special guest blogger, Alyssa Myers of Harris Divorce and Family Law.

An inheritance is generally considered separate property in a divorce proceeding.  This means that it is not part of the marital estate and therefore, not subject to equitable division.  This remains true regardless of whether the inheritance was acquired before or during the marriage.  However, there are certain actions that may result in your spouse having a viable claim to your inheritance, if it can be inferred that you have used your inheritance to make a “gift” to the marriage. If the parties cannot come to an agreement, a judge will decide whether property is marital or separate.

When is your inheritance at risk?

An inheritance will remain your separate property so long as it has not been commingled or transmuted with any other marital assets.  This can happen in a variety of ways and can become quite costly to untangle. A few examples of ways otherwise separate property may become transmuted or commingled are:

  1. Placing funds in a jointly titled account
  2. Using the funds to actively participate in the buying and selling of equities
  3. Using the funds to purchase real estate
  4. Using the funds to pay marital bills and expenses

To avoid transmutation or commingling, it is important to keep separate property truly separate. This means keeping funds in an individually titled account, and if you do spend the money, keeping good records of when and how the money was spent.  For example, if you invest $50,000 of your inheritance into an individual brokerage account containing marital funds and that money doubles in value during the course of the marriage, you may be able to carve out and retain your separate property if you have maintained clear records. However, such an investment into a jointly titled brokerage account would be inferred as a gift to the marriage.

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