Inheriting a house can come with lots of aspects that need to be considered, especially what happens if you inherit a house with a mortgage. However, if you’re also dealing with a divorce it can often become more complicated. There are several factors to take into account; the first depending on how your assets are clarified.
So what’s the difference between marital assets and non-marital assets?
Marital assets are essentially any property, such as stocks, bonds, houses, or pensions, that has been obtained during the marriage. It doesn’t matter which name the property is in, or who holds the title, it’s considered shared property in the marriage, and is usually split 50/50 between the spouses in a divorce.
Non-marital assets refer to property that is gained from outside the marriage, whether that’s before or after the marriage. This can include inheritances if they’re attained before the marriage, but if a spouse inherited property during the marriage, other things need to be considered. It’s also worth remembering that not all assets that are gained before marriage count as non-marital assets. For example, if you were to inherit a sum of money before the marriage and kept it separate, in your name only, it would be considered a non-marital asset. If you used some of this money to put a deposit down on the family home that you buy after marriage, that money can then be considered a marital asset and is open to your partner in a divorce.
If you inherit during your marriage, it will depend on how you keep the property to determine if it becomes a marital asset or a non-marital asset. If you keep the property separate from the other marital assets, it can still be considered a non-marital asset. If, however, the proceeds are combined with your other marital assets, it can make the property a marital asset, and therefore at risk of division in the proceedings of a divorce.
How do I keep the inheritance separate?
It’s important to avoid combining your inherited property with any of the marital assets, such as shared stocks or bonds.
If your inheritance involves liquid assets, which can range from investments accounts to cash, you want to ensure that it is registered only under your name, not your spouse. If it’s real estate, then it should only be titled under you, in your bank account and not in a shared account with your spouse, as this can raise issues. This separation from the marital assets will keep your inherited a non-marital asset, and therefore protect it in the case of divorce.
How can I protect my inheritance?
It may also be beneficial to consider a consent order; a legally binding document that outlines how things like the marital property, savings, and any outstanding debt get split in a divorce. This order will also make sure that your partner can’t make a future financial claim against you if you receive an inheritance or make money from something like property investment. This is a really helpful way to protect an inheritance that you know you will receive but has not yet been finalized.
Knowing these things should help you through a difficult time in your life, allowing you to focus on the most important things and not have to worry about your inheritance. If you need help with selling an inherited property We Buy Any House can help guide you through the process.