One of the more complex parts of dissolving a marriage is the distribution of assets between spouses. Deciding who gets what can turn the most amicable divorce into a prolonged and bitter battle. In every state, statutory laws protect inheritances, as long as they are kept segregated from shared spousal assets. If you take the right steps to protect an inheritance, it belongs to you both during the marriage and after a divorce.
Inheritance Before the Marriage
A spouse who brings an inheritance into the marriage maintains sole and separate possession of it after the marriage ends. However, if inherited funds are deposited into a joint account, or shared marital funds are added to an inheritance account, those inherited funds or property are considered to be comingled. Comingled assets become marital property, and thus subject to distribution between both spouses.
In some cases, one party may decide to prove the inherited funds were never intended to be shared, but this does involve a high burden of proof. Maybe you tried to prevent your spouse from accessing inherited funds or asked them not to visit or work on an inherited property. These types of actions demonstrate your attempts to prevent comingling and may protect your inheritance from being divisible during the divorce process.
Inheritance During the Marriage
Inheritances received during the marriage are not generally considered marital property. As such they are not subject to equitable distribution. However, once some or all of an inheritance is deposited into a joint account or used to benefit marital assets, like the primary residence, it is considered “shared.” Thus the rules of distribution change. After the inheritance has been comingled, it is subject to the state laws of distribution.
Protecting an Inherited Property
There are steps you can take to protect your inheritance. If you have received a non-monetary inheritance, like a home or business, you can protect it by using only your own, non-marital funds to repair or maintain it. As soon as you use marital funds to improve the property, your inheritance is no longer sheltered. If your spouse offers physical labor to take care of an inherited home or other asset, they have now invested “sweat equity” in your inheritance, and may earn a piece of it if the marriage ends.
You can also maintain sole possession of an inheritance by avoiding transmutation. Like comingling, transmutation is a more subtler form of blurring the line between assets. For example, if you use marital funds to pay a contractor to work on a home you have inherited, transmutation has occurred. Transmutation can occur over time, but it drastically impacts your claim on your inheritance after divorce.
Somerset Divorce Lawyers at Lyons & Associates, P.C. Help Clients Protect Their Assets During Divorce
When it comes to divorce, inheritances are different than other assets because they are not subject to distribution after a couple separates. Our Somerset divorce lawyers at Lyons & Associates, P.C. can help you protect your inherited assets in case of a divorce. Even if you are not contemplating divorce, protecting your inheritance is always a good idea. To discuss your situation with a member of our legal team, call 908-575-9777 or contact us online.
Lyons & Associates, P.C. is conveniently located in Somerville, to serve clients throughout New Jersey including Bridgewater, Basking Ridge, Mendham, Morristown, South Plainfield, Somerset, Somerset County, Morris County, and Union County.