If you have received a substantial inheritance and are currently married or are soon-to-be married, you need to understand how divorce might affect your inheritance.
Whether you will have full control over your inheritance depends largely on what you do with it. In Colorado, property is divided equitably in divorce. If you receive an inheritance, that inheritance is what is known as separate property. Separate property is not divisible in divorce; however, depending on how you handle your inheritance, it is possible for it to become marital property.
A way that your spouse could lay claim to a part of your inheritance is through what is known as commingling assets. This means that you combine your inheritance assets with your joint marital assets. This usually happens when the inheritor places money from inheritance into a joint checking account, but that’s not the only way assets can be commingled. Commingling also happens when inheritance is used in a joint purchase ”“ for example, using inheritance money to purchase a marital home.
One way to protect your inheritance, or a part of it, is to obtain a postnuptial agreement dictating which part of the inheritance is marital and which is separate. The easiest way to protect your inheritance though, is keeping it in a separate account. Know this, however ”“ if you share a portion of your inheritance, but keep some of it in a separate account to protect it from divorce, the portion you hide away may still be considered marital property. Sharing a portion of your inheritance creates a presumption that you intend to share all of it. If this is not the case, proving that you did not intend to share the whole inheritance is a burden placed on you, the inheritor. This means you must have ways of showing that you did not intend to share the whole thing, such as requiring both parties’ signatures on joint accounts for withdrawals. If you do commingle assets, a divorce lawyer may be able to help you trace back the assets to the original owner, which can help your argument that the property was separate, not marital.
If you have questions about property division and are worried about your inheritance in divorce, discuss your concerns with a Colorado family law attorney.