How Can I Shelter Inheritance From a Marriage?

By Stephanie Kurose, J.D.

How Can I Shelter Inheritance From a Marriage?

By Stephanie Kurose, J.D.

If you receive an inheritance, it's considered separate property as opposed to marital property. Marital property is any property you or your spouse acquire while married. State law protects inheritances by declaring that a spouse does not have any right to it during or after your marriage, as long as it's kept separate. To shelter your inheritance from your marriage, you must ensure that it's segregated from your marital property by avoiding commingling, transmutation, or any nonmonetary contributions from your spouse.

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Commingling Separate and Marital Assets

When you commingle an inheritance with marital property, it's no longer sheltered because it ceases to be separate property. Commingling means you've put it together with marital money or property. For example, if your inheritance is cash and you deposit it into a joint banking account owned by both you and your spouse, you have successfully commingled your separate property with marital property.

If you commingle your inheritance and live in a community property state—a state where courts divide marital property 50/50 in a divorce—your spouse is entitled to half of that inheritance. If you live in an equitable distribution state—a state where courts divide property in a way that's "fair and just" as opposed to an automatic 50/50 split—your spouse is still entitled to receive a portion of that inheritance. Exactly how much is at the discretion of the judge.

Nonmonetary Contributions from Your Spouse

Any nonmonetary contributions from your spouse to your inherited property can also leave it unsheltered. For example, if you inherit an old house that needs repairs and your spouse decides to fix it up to improve its condition, the house may no longer be considered separate property.

Known as "sweat equity," a court may take into consideration the amount of work your spouse put into the property when it's considering if it's still separate. To retain the house's immunity from consideration as marital property, you either have to fix it up yourself or pay someone else to do the work. However, if you pay someone with marital money, it could be considered marital property.

The Process of Transmutation

Similar to commingling, transmutation is a gradual process of combining separate and marital property. For example, if you use marital property to pay for repairs to your inherited property, you begin to erode its immunity from being considered separate property.

If you take out a loan in both you and your spouse's names to pay for repairs, and then use your income to make monthly payments, you are technically transmuting your property from a separate inherited asset into marital community property.

Defending Separate Property in Court

In a divorce dispute over whether an inheritance is still considered your separate property or has become marital property, you have the burden of proof to convince the court that it's intended to be separate, despite any errors you made in handling it. For example, if your spouse insisted on making the repairs and ignored your objections, that might be a defense because you did not intend to share your inheritance—you didn't agree to the labor.

If you take precautions to ensure your spouse cannot access the inherited property on their own, a court may also consider that a defense. For example, if you commingle inherited cash in a joint bank account but require both you and your spouse's signatures before any withdrawals can be made, it prevents your spouse from being able to unilaterally withdraw money on their own.

If you have any further questions about how to keep an inheritance separate from your marriage, consider enlisting the help of a professional.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.

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