Is an Inheritance Received During Marriage Subject to Division?

by Ellis Roanhorse
Inheritance may be subject to division if commingled with marital assets.

Inheritance may be subject to division if commingled with marital assets.

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Spouses who receive an inheritance are entitled to do whatever they please with it while married. This includes sharing it with the other spouse or keeping it separate. If kept separate, inheritance is generally not subject to division. However, inheritance may become subject to division during a divorce under certain circumstances.

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Marriage and Property

In marriage, property generally falls under one of two categories: community property and separate property. Community property consists of marital assets obtained during the marriage, for example, wages and items purchased using marital funds, such as the marital home. Community property is owned jointly and shared equally by both spouses. Thus, it is generally divided between spouses upon divorce. Separate property consists of personal items, gifts, money and property owned by either spouse prior to marriage. Gifts received by one spouse during the marriage are separate property so long as they are never used to benefit the other spouse or marriage. An inheritance is also considered separate property unless the spouse who received it combines it with community property.

Inheritance

An inheritance is the sole property of the spouse who received it, regardless of whether it was received before or during the marriage, and not subject to division. The only time inheritance may be subject to division is when a couple decides to divorce or if inheritance funds were shared or used to purchase marital property during the marriage.

Commingling Funds

When separate property -- such as an inheritance -- is combined with marital assets, it is said to be "commingled." Commingling separate property changes its nature. In other words, it is converted into community property and subject to division. For example, if a spouse receives an inheritance and deposits the inheritance funds in a joint checking account, it will likely be converted into community property. Moreover, if a spouse uses inheritance proceeds to purchase a home in which both spouses live, it will likely lose its separate nature.

Avoiding Division of Inheritance

If a married person does not want to divide his inheritance upon divorce, he may keep it entirely separate from community property. Depositing the inheritance in a separate account -- and keeping it out of a joint account -- may ensure it is not converted into community property and subject to division. If a married person shares a portion of his inheritance, it is generally presumed he meant to share all of it. Thus, he may have to prove sharing the entire inheritance was not his intent. It may be possible to distinguish inheritance from marital assets, if the two were commingled, by tracing the source of funds. However, the burden of proving there was no intent to share the inheritance is on the spouse who received it.