Families in Texas may benefit from learning more about how divorce and property division may affect inheritances. In many situations, inheritances are not subject to division or equitable distribution because the assets are considered to be separate property. The beneficiary of the inheritance is often recognized as the sole owner of the assets. However, states may treat inheritance and property division differently, depending on the particular circumstances.
If the inheritance was deposited into a joint account and used for paying expenses, the actions may be perceived as comingling funds, thus making the assets marital property. The inheritance also loses its immunity from property division if it is used to invest in marital property, such as remodeling the family home. Spouses should note that once assets or funds are comingled or used on joint property, the designation of separate property is no longer valid.
Even if the inheritance was acquired before marriage, if the asset has been comingled afterwards, it may be treated as marital property and subject to equitable distribution in divorce court. Some spouses protect separate property acquired before marriage by having their partner agree to sign a prenuptial agreement. If the one party can demonstrate proof that there was never any intent to comingle assets, a family court may designate a specific portion of the funds to remain classified as separate property.
Spouses who need more help understanding how their assets may be affected by an impending divorce may benefit from obtaining legal counsel. A divorce lawyer may be effective in serving as an intermediary who can negotiate amicable terms regarding property division. Legal counsel might also be effective in assisting with other aspects of family law or divorce, such as spousal maintenance and terms of the parenting plan, which might include visitation schedules, custody rights or child support.
Source: Findlaw, “Inheritance and Divorce“, November 25, 2014