Divorce is complicated and understanding how assets are classified and divided is key. In community property states like Texas, assets acquired during the marriage are typically divided equally between spouses. Marital and separate property is a big part of that. Inheritances often raise questions about whether they’re marital or separate property. You need to understand the legal framework and strategies to protect an inheritance during a divorce and keep it with the right person.
This blog will walk you through how inheritances are treated in divorce, how to protect them, and why you need to work with a marital property division lawyer in The Woodlands.
Marital vs. Separate Property in Divorce
In divorce, the difference between marital and separate property is key to the division of assets.
Marital Property
Marital property is assets and debts acquired by either spouse during the marriage. This includes but is not limited to income earned by either spouse, property purchased with that income, and other assets acquired during the marriage regardless of whose name is on the title. The principle is that both parties have contributed to the marriage and therefore should share in the assets.
Separate Property
Separate property is assets owned by either spouse before the marriage, as well as inheritances and gifts given to one spouse during the marriage. These assets are typically considered separate property and are not divided in divorce as the assumption is they belong to the individual spouse. Inheritances are generally regarded as separate property, particularly under Texas law, unless they are commingled with marital assets. Classifying property as separate can have a big impact on the financial outcome of a divorce as it can protect certain assets from being divided.
Marital vs. Separate Property
However, the lines can get blurred over time especially when separate property is commingled with marital assets or used for marital purposes. In that case, what was once a separate property can be reclassified as marital property and divided. Understanding these subtleties is key for anyone going through a divorce as the classification of assets will impact the division of property and the settlement.
Inheritance Rule
Inheritance is a big part of divorce and understanding how it’s treated under the law is important for both parties.
Inheritance as Separate Property
Under most laws, inheritance is separate property. This means any inheritance received by one spouse during the marriage is not divided in divorce. The reason for this rule is that inheritance is meant to benefit the individual receiving it not the marital estate as a whole. So assets inherited generally stay with the recipient as long as they’re kept separate from marital assets. To ensure that an inheritance remains separate property, it is crucial to keep it in a separate account and avoid using it for marital expenses.
Situations Where Inheritance Becomes Marital Property
Although the general rule, there are situations where inheritance can become marital property. This reclassification can happen if the inheritance is commingled with marital assets or used for marital purposes. For example, if an inheritance is deposited into a joint bank account or used to pay for joint expenses, it may lose its separate property status. The court may then view the inheritance as a contribution to the marital estate and divide it in divorce.
Why Separate Status Matters
To keep an inheritance separate you must keep it separate from marital assets. This means separate accounts and not using inherited funds for marital expenses. Proper documentation and careful management of inherited assets will prevent them from being classified as marital property and divided in a divorce.
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Is Inheritance Marital Property? appeared first on Woodlands TX Family & Divorce Lawyer.
