Inheritance and Divorce: Legal Considerations for Protecting Inherited Assets
When you bring unusual assets into a marriage, it makes divorce even more complicated than it already is. This includes inheritances, both those received prior to marriage and those received during the course of marriage.
If you’re getting divorced and you’re concerned about losing part of your inheritance to your ex-spouse, let’s talk more about what to expect and how we can help you. Call John H. Ruby & Associates at 502-373-8044 to schedule a consultation right away.
Legal Considerations of Inherited Assets in Divorce
During divorce proceedings, dividing assets is often a complex and contentious step. No one wants to leave with less than they brought in, and both parties want to have what they need to start a new life. This step is particularly stressful for individuals who have received an inheritance, as they may worry that their inheritance will be split up in the course of their divorce.
If you’ve received an inheritance, it’s important to learn more about the legal considerations that affect how your inheritance is treated during divorce. This applies to a wide range of inherited assets, including real estate, investment accounts, possessions, and money.
Protecting Your Inherited Assets During Divorce
Your primary goal at this stage is to protect your inheritance. You must know how your inherited assets are characterized in your jurisdiction. In Kentucky, inherited assets are generally considered separate property—not marital property. This is true regardless of when the inheritance is received.
Generally, any assets received or earned during a marriage are considered marital property. However, this does not apply to inheritances. Inheritances that are given solely to one party remain the property of that one party in most circumstances.
Another important part of protecting your assets is keeping them separate throughout the course of your marriage. Inheritances start as separate property, but they may become marital property over time if they are not kept separate. If your inheritance is commingled with marital property, the court may declare it marital property at the time of your divorce.
How do you keep assets separate? Keep them in your name only—this applies to things like bank accounts and homes. You should also avoid using the inherited assets for joint purchases and avoid using marital funds for the upkeep and maintenance of the assets.
You should also keep track of all inheritance-related documentation. In order to keep it separate as an inherited asset, you have to be able to prove that it’s an inheritance. Along with the documents received at the time of inheritance, maintain documentation of transactions related to the assets, any transfers in ownership, and changes in value. The more proof you have that the asset was treated separately during the marriage, the harder it will be for your spouse to argue that it should be marital property.
The Role of Prenuptial and Postnuptial Agreements
Prenuptial and postnuptial agreements are effective tools that can be used to protect your inherited property. If you’re already at the point of divorce, obviously this will not be very useful for you—but if you have an inheritance and you’re looking for ways to protect it in case of divorce, this could be helpful.
By working with a family law attorney in Kentucky, you can create a prenuptial agreement with specific provisions to protect your inheritance. Your attorney will know how to create a legally binding document that brings you peace of mind and streamlines the divorce process should you ever split up.
Your prenuptial or postnuptial agreement should clearly state that your inheritance will be considered separate property in the event of a divorce. This type of agreement can also be useful if you have an inheritance and children from a previous relationship. You may wish for your inherited assets to pass solely to your children should you pass, rather than getting split between your spouse and children.
Explore Your Legal Options with John H. Ruby & Associates
There are lots of options to consider when you want to safeguard your inheritance during a divorce. Let the team at John H. Ruby & Associates help you during this stressful and challenging time. Call us at 502-373-8044 or fill out our online contact form to set up a time to talk to our team now.