Standardly, inheritance is not considered a marital asset and is usually identified as a non-marital asset, meaning it gets left out of the divorce proceedings. This does not always apply, however. If the inheritance was deposited into a joint account between you and your ex-partner and was used for what is considered a marital expense; buying a house, or paying to improve a property you’re already in, can make your inheritance count as a marital asset.
What if I inherit during the divorce?
If you inherit a property during your divorce, then your inheritance should be safe. It would have had to be inherited during your marriage and used as a couple in some way for it to count as a marital asset, so if you receive it after you have separated it eliminates the opportunity for the inheritance to be used in this way. You also might need to look into what happens if you inherit a house with a mortgage too and how this might affect you.
This can differ sometimes. If there are young children involved in the divorce, and the financial needs for both you, your ex-partner and your children then the inheritance may be considered to provide financial stability for the children.
What about an inheritance I will be getting in the future?
Any future inheritance is usually not involved in the divorce, but this can also differ depending on individual circumstances. If the inheritance that is due is of such great value that it completely changed the financial settlement that is reached, it may be brought into consideration.
What if I get remarried?
If you receive a large inheritance down the line and your ex-partner tries to make a claim that they are entitled to a share, if either of you has remarried then this will be denied immediately. Any entitlement that either one of you has in the other’s finances will expire if one of you remarries, leaving you free to choose whether you want to keep, sell, or rent out your inherited property.
How can I keep the inheritance as a non-marital asset?
You would need to make sure that you do not combine anything that you inherited with your other marital assets. If your inheritance involves liquid assets, like cash or investment accounts, then you’ll need to register it in an account in your sole name, keeping it separate from your partner. You will also need to keep the funding away from any marital assets, such as the marital home; if you were to keep your inheritance in a private account, but use a chunk of it to make home improvements to the property, it could be considered a marital asset.
The same goes for inheriting real estate, it should just have your name on the deed to ensure it does not become a marital asset.
Overall, it will depend on the circumstances as to whether your inheritance will be involved in your divorce. If it is, sometimes the easiest way forward is to sell the property and split the proceeds, allowing you and your ex-partner to go your separate ways and start afresh. If you’re looking to sell your inherited home, visit We Buy Any House today for a free offer.
When you inherited you may have been wondering, how long does probate take? We’ve outlined the process so you can know everything you need to, easing your mind in a stressful time.