When one spouse receives an inheritance, whether large or small, many questions arise about who this money belongs to. Do the courts classify this as marital property, subject to equal division in the case of a divorce, or do they classify it as separate property?
Many factors come into play, but in general, an inheritance belongs to the spouse who receives the legacy.
The importance of keeping the money separate
According to Woman’s Divorce, inherited assets should remain separate from other marital assets if one spouse wishes to hold onto the money during a divorce. This means maintaining a separate account devoted to these assets. If the inheritor pays off joint bills with the money or mingles them in a joint account, then the money is likely to become marital property.
Time can figure into the equation as well. If one spouse inherits a house, and the home gains equity over the years, the division of the property becomes more complicated. If both spouses contributed to the upkeep of the home, then both have a claim on at least a portion of the gains in home equity.
The importance of state law
Each state may have different laws for the division of marital property in a divorce. According to the Virginia State Bar, Virginia law classifies assets as marital, separate, or part marital and part separate. The courts have a responsibility to value these assets and to divide them equably based on current law.
Separate property includes assets acquired by either spouse before the marriage as well as assets acquired during the marriage by inheritance. Keeping these assets separate helps avoid confusion during a divorce.