Who gets to keep the inheritance in a divorce?
Oct 16 2015 - Posted by On Behalf of the Lincoln Law Firm, PPLC, in Divorce, High Asset Divorce, Tagged in high asset divorce
Many Houston residents will receive an inheritance from a family member at some point in their lives. Sometimes these inheritances can be small and sometimes they can be in the millions of dollars. A person who receives an inheritance and later goes through a divorce with their spouse may be interested in knowing what will happen to that inheritance after a divorce.
Although Texas is a community property state, not all assets are divided equally. An inheritance may be one asset that a person can keep without sharing with their ex. If a spouse wants to keep their inheritance separate from marital property, one of the first things they should do is deposit the inheritance into a separate bank account with only their name on it. If the inheritance money is commingled with the family money it can cause problems during a divorce and may no longer be considered separate property.
In addition to a separate bank account, prenuptial agreements are also a good idea. There should also be paperwork showing the inheritance was to the one person, like a gift tax return. If a person inherits property, the property should remain just in their name and not have their spouse added to the title.
Although most people don’t believe their marriage will end in divorce, it can be wise to plan ahead with money matters just in case. An inheritance can be something that a person is able to keep separate from a divorce settlement, and a legal professional skilled in family law can help people navigate this kind of family law issue.
Source: wsj.com, “How to keep your inheritance in a divorce“, Neil Parmar, Nov. 9, 2014