What Happens When Someone Dies & Leaves You With a House in the Middle of a Divorce?

By Heather Frances J.D.

When you file for divorce, you and your spouse can reach an agreement on how you want to divide your assets, or the court might determine the division of assets for you. However, some assets, like a house you inherit during your divorce proceedings, are not typically subject to division in a divorce proceeding.

Separate Property Vs. Marital Property

Assets you own fall into one of two categories: marital property or separate property. The definitions of each category are similar in most states, even between community property states, which distribute property equally, and equitable distribution states, which distribute property equitably, but not necessarily in a 50/50 split. Assets acquired during the marriage, regardless of who acquired them or whose name is on the title, are usually considered marital property. One exception to this rule is property acquired by gift or inheritance -- which is generally considered the separate property of the spouse who received it.

Property Division

Under most circumstances, a divorce court cannot divide separate property since it belongs solely to one spouse, particularly property inherited after the date of separation. However, even if a divorce court cannot divide the house as marital property, inheriting the house might impact the court’s division of marital property. In states that divide property equitably between spouses rather than equally, the judge might consider each spouse’s separate property resources, such as the inherited house, when dividing marital property -- and give more marital property to the spouse who did not inherit the house since the needs of the spouse who inherited are no longer as great.

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Transmutation

Spouses can agree to change the character of separate property into marital property; this type of transfer is called transmutation. Some states require written transmutation agreements for valuable items as evidence that the spouses intended to change the character of the property. If the transmutation was the result of fraud, however, the court will invalidate the transfer. If the spouse who inherited a house wishes to get an increased share of a marital asset, he could transmute the house to marital property. When state law requires transmutation agreements, strict compliance with the law is required for court approval.

Commingling

Spouses can accidentally cause their separate assets to become marital property by commingling, or mixing, separate and marital assets. For example, if spouses live in the inherited house and use marital funds for its upkeep, any increase in the house’s value -- or even the house itself -- could become marital property. Inheriting property in the middle of a divorce might be the best time to inherit since the divorce lessens the chance of the inheriting spouse unintentionally doing something to turn the separate property into marital property. For example, if during your divorce, you inherit a house that you intend to use as a vacation home, you wouldn't offer your spouse the keys so that she can vacation in it as well. Also, if you intend to make improvements to the home before the divorce is final, you would want to use separate funds rather than marital funds to pay for any improvements. The same holds true for paying taxes or insurance premiums in relation to your inherited home; you wouldn't make any of those payments from marital funds, even if the divorce drags on for months.

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Ohio Divorce Law on a House in a Spouse's Name

References

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Inheritance Laws During Marriage in New Jersey

Nobody likes to think about divorce when they're happily married, and most couples don't plan their day-to-day activities and decisions around the possibility. If you don't give it some thought, however, you could end up sharing your separate property if your marriage ends. Under New Jersey law, if you receive an inheritance while married, it's yours alone – unless you do something to change that.

How Is Marital Property Divided in Maryland If You Divorce?

Maryland courts divide marital property based on the law of equitable distribution. This is the legal way of saying that you may or may not receive 50 percent of the assets you and your spouse acquired during your marriage. However, you can divide everything equally by agreement and the court will honor that. But if you can’t come to an agreement and you need the court to apportion your marital property for you, a judge will do so in a way that seems fair to him. This may or may not also seem fair to you.

Tangible Property in Divorce

Tangible property is anything you can touch, including vehicles, houses and family photos. In a divorce, all tangible property that is part of the marital estate is subject to division during a divorce. Dividing up tangible property acquired during years of marriage can intensify emotional stress and drive up legal fees. Deciding what to do with the family home can be difficult, but it is easy to put a dollar value on it by having it appraised. Deciding who gets to keep sentimental items that might not be worth a lot of money can sometimes be more difficult.

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