How is my inheritance treated in a dissolution of marriage? Does my spouse get half of it as part of the division of assets and debts?
As a general rule, an inheritance is not a marital asset. When your Great Aunt Mary dies and laves you a bequest of $10,000.00, that money is not marital because it was not “earned” by one of the two parties. However, what happens if the money is distributed and then placed in a joint account? Once the cash is placed in a joint account, it loses its non-marital status and it becomes part of the marital assets. The court will treat it as a gift to the marriage or other spouse because the title has changed from one spouse to both.
Of course, if Great Aunt Mary left the $10,000.00 to you in a trust account, your title and beneficial ownership of the funds never changed. In that event the funds are not marital and not subject to the equitable division of assets and debts.
But what if you received the cash and put it in an account in your name only? If you never put marital funds into that account, the account will stay non-marital. If you put marital funds into the account, the account will lose its non-marital character because the courts cannot distinguish between the marital and non-marital funds once they are mixed.
If you put the money into an investment account in your name alone and then mange the account to make it grow, the increase in value will be marital because it is the result of your efforts during the marriage.
It sounds complicated because there are so many variables. This is why there are lawyers; to assist in making sure that the correct assets are divided in a divorce and those assets that should not be divided are not included in the distribution. If you need my help, go to my web site at www.peppler law.com or call my office for a consult.