Proving Money Is Inherited

By Rob Jennings J.D.

Each state has its own laws regarding the division of marital property in a divorce. Community property states, which stand in the minority, require courts to divide an estate equally, whereas equitable distribution states -- the majority -- seek to divide estates equitably, or fairly. In both types of jurisdictions, inherited money is usually considered separate property and not divisible in divorce. The burden of proving that certain funds represent your inheritance, however, will likely rest on you.


Since there's a good chance you weren't anticipating a divorce when you received your inheritance, you may have to engage in forensic accounting to show your trial judge that you inherited a given pool of funds. This practice, called "tracing," requires you to clearly follow the line from your inheritance to the account or asset where you contend it rests presently. Although state laws on tracing inheritances vary, you may have to prove the separate identity of the destination account or asset by the greater weight of the evidence.


The extent to which you commingled, meaning mixed, your inheritance with marital property may limit or even eliminate your ability to trace money and extract it from the marital estate. Generally speaking, marital property consists of all property received during a marriage but sometimes, the definition excludes property received by either spouse via gift or inheritance. Depositing inherited funds in an account that also includes marital funds -- proceeds from paychecks or the sale of marital property -- could make it difficult for you to prove how much money remaining in the account is owned jointly and how much is separate. Since the burden of proof rests on you, any confusion could be resolved in favor of the other side.

Divorce is never easy, but we can help. Learn More


Transmutation occurs when a spouse does something to change the separate or marital nature of funds or an item of property. In North Carolina, for example, using inherited funds to purchase jointly titled real property usually results in that property being classified as marital, no matter how clearly a party can trace the purchase back to an inheritance. Using an inheritance to buy gifts for one's spouse or pay down marital debts can also result in transmutation. Where transmutation exists, tracing generally ends and the property loses its separate nature.

Distributional Factors

In equitable distribution states, where courts can award unequal distributions in the presence of certain statutory factors, you may indirectly recover all or part of an inheritance lost to commingling or transmutation. Even if you used your inheritance to pay off marital debts or purchase jointly owned property, your equitable distribution judge may use the investment of your inheritance in the marital estate as a distributional factor, justifying an award to you of more marital property or less marital debt than the other side.

Divorce is never easy, but we can help. Learn More
Divorce & Bank Accounts


Related articles

Is a Wife Entitled to the Husband's Inheritance Under California Law?

Spouses enjoy a unique degree of togetherness in California. It's one of only nine states that observes community property law, where everything acquired during the marriage belongs equally to both spouses. Even community property states draw the line at inheritances received before or while you're married, however.

If Your Spouse Cleans Out Your Joint Account Before a Divorce, Can You Legally Get That Money Back?

When two people hold a joint account, they each have an equal right to its balance, regardless of whether or not they're married. The situation changes, however, when a married couple separates. The divorce process gives rise to property rights on the part of each spouse as to all items considered marital property.

Inheritance Laws for Married People in Connecticut

You might think of an inheritance as your own property, even if you received it while you were married. After all, the money was left to you, not your spouse. However, Connecticut law allows inheritances to be divided in a divorce. Connecticut divorce courts divide property on a case-by-case basis, considering the specific circumstances of each case before splitting property.

Get Divorced Online

Related articles

How to Trace a Commingled Inheritance for a Divorce

The longer you’re married, the more likely you are to commingle or mix your legally separate property -- such as an ...

Tennessee Divorce Law Concerning Inheritance

Tennessee law requires an equitable division of property between two parties in a divorce. However, Tennessee law does ...

Financial Gifts in a Divorce

In many cases, if you personally receive money as a gift, it will not be affected by a divorce. Generally, gifts made ...

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

When you file for divorce, you and your spouse can reach an agreement on how you want to divide your assets, or the ...

Browse by category
Ready to Begin? GET STARTED