Inheritance in Divorce

When you decide to end your marriage, you need to accept a totally new way of life and split everything you have gained with your soon-to-be ex during your marriage. Depending on the state rules, all joint property may be divided equally or equitably between spouses.

But what happens to items one gets as a gift from third parties or inherits from deceased relatives? They are supposed to be personal and not divided. Right?

Well, the question of inheritance and divorce can be quite tricky at times and fraught with serious conflicts and litigations. The reason is the negligence in handling separate assets and transforming them into marital property, which may happen intentionally or accidentally.

In fact, the most common questions the divorcing clients ask their lawyers are: “Is my spouse entitled to my inheritance when we get divorced?”, “Can ex-wife claim inheritance after divorce?”, “Is my husband entitled to my inheritance?”, and the like.

As a general rule, in a Florida divorce, inherited property is not subject to division and should be left with the owner party. However, there is a range of exceptions and accompanying factors that can influence the process of property distribution.

In this article, we will try to explain what happens to inheritance in a divorce, why it can become subject to division, how inheritance is handled in divorce, and how you can protect it.

Marital vs. Separate Property

When it comes to divorce and the distribution of assets, in particular, the court distinguishes between marital and separate property.

Marital property refers to all the joint assets a married couple acquired or accumulated during a marriage. These can include:

  • Assets acquired by the spouses jointly or separately;
  • Liabilities incurred by the spouses jointly or separately;
  • Active or passive increase in value or appreciation of separate assets as a result of either party’s contribution;
  • Gifts made by either spouse to the other party;
  • Benefits, rights, and funds related to pensions, retirement and insurance plans, annuity, etc.;
  • Real property and personal property held and titled jointly by the parties as tenants by the entireties ( Stat. § 61.075(6)(a)).

In Florida, all marital property should be divided between the parties equitably. After considering all the relevant factors, the court decides what share to award each spouse so that it would be fair.

Separate property is all the assets that came to one of the spouses outside the marriage. It may include:

  • Any assets acquired by either party before the marriage;
  • Gifts received from someone other than the spouse before or during the marriage;
  • Inheritance – assets received by one of the parties by “bequest, devise, or descent” before or during the marriage;
  • Liabilities incurred by one party before the marriage;
  • Income derived from separate property during the marriage if it was not treated as marital by the couple;
  • Any assets and liabilities acquired and incurred during the marriage defined by the spouses as non-marital in a specific prenuptial or postnuptial agreement;
  • Liabilities incurred via forgery;
  • Any assets and liabilities acquired or incurred, respectively, during the marriage in exchange for assets and liabilities listed above ( Stat. § 61.075(6)(b)).

Normally, separate or non-marital assets and liabilities are not divided and should be left to the owner party as stipulated in Florida statutes.

So, everything that belongs to only one spouse is not supposed to be divided during divorce. Yet, the issue of ownership can be very contradictory in marriage. In many cases, the answer to the question, “Is an inheritance marital property?” may be quite challenging to find. Much depends on your specific circumstances and the way you treated your personal assets during your marriage.

Want to know, “When does an inheritance become marital property”? Let’s find it out together.

When Is My Inheritance Separate Property?

All the assets you inherit are considered your separate property as long as there is only your name on them, and you keep them separate from your family joint accounts and other assets. Is inheritance protected in divorce? No, if you do not take care of its protection yourself.

The thing is that any separate property can become marital as soon as you transfer or mix (or commingle) them. It can be done intentionally or sometimes unknowingly. Therefore, even if you have never thought about divorce and inherited property before the wedding, you need to be extremely careful to avoid questions like, “Do you have to split inheritance in divorce?”

Many family law attorney’s clients often ask, “Do I have to tell my ex or the court if I receive a large inheritance?“ Probably, you should. Any attempt to hide or lie about assets is punishable and may negatively affect property division, spousal support award, and even child custody orders during the divorce process. On the other hand, if you have just received it and had no opportunity to put your spouse’s name on it or mix it with any marital accounts yet, it means that it totally belongs to you and will not be subject to any equitable property distribution.

Any property you own can become marital or even the other party’s personal asset if you make it so voluntarily. In other cases, you may transfer your right to sole ownership out of negligence, not knowing how the issues of divorce and inheritance are resolved.

So, if you want to know how to protect inheritance from divorce, the answer is very simple: keep your own property separate from any marital assets and ensure that you have all the documents that prove your sole ownership.

Is My Spouse Entitled to My Inheritance in Divorce?

Even though Florida law views inheritance as separate property, your intentional or unintentional actions can change its status. Therefore, the answer to the question, “Is my spouse entitled to my inheritance when we get divorced?” depends on your specific circumstances.

One of the cases when the other party can claim some part of your inheritance is transmutation, when the owner changes the asset’s entitlement.

For instance, suppose you inherited a Chevrolet Camaro from your uncle before marriage and decided to present it to your spouse as a wedding gift. Therefore, you re-title the car in your spouse’s name, which makes it their property and gives them the right to keep it after divorce.

Another example is when you move into the house that you have received from your deceased grandma after the wedding and put your spouse’s name on the deed. As it has become your joint marital property, it should be divided when you terminate your marriage.

So, can your spouse take inheritance in divorce? Yes, it is possible if you intentionally title some of your property jointly or re-title it in another person’s name.

In other cases, only some part of an asset may become subject to division – mostly its increased value. If you did not put the other party’s name on the deed, the inherited mansion you both live in is still your separate property. However, in the course of your marriage, your spouse could have put their effort or their own funds into the house’s improvement, which has contributed to its appreciation. In such a case, guided by Fla. Stat. § 61.075(6)(a)b, the court will consider this increase in value to be marital property and divide it between you two equitably.

Besides, you can turn your personal inherited property into marital if you commingle it with your joint matrimonial assets. More often than not, it happens accidentally, without your understanding of the legal mechanisms.

For example, if you get a tidy sum as a gift or inheritance from your relative and deposit it into the savings account that you own jointly with your spouse, you turn it into marital. If you use the same money to buy a house with both your names on the title, this house is not considered your separate asset. If you preserve the inherited money on your separate account but give your spouse permission to use it, access it, and invest money, it’s already your joint marital asset.

So, if you wonder, “Can inheritance be taken in divorce by my spouse?” the answer is affirmative if you change the property status intentionally or accidentally.

Can I Claim My Ex’s Inheritance Received After Divorce?

Anything inherited by either party after the marriage ends is considered their own separate property that cannot be turned into marital anymore. Therefore, you cannot legally seek a claim on inheritance received by your ex when you are no longer married.

However, there are cases when the property inherited after divorce can influence its aftermath. It concerns alimony and child support awarded by the court.

According to Fla. Stat. § 61.14(1)(a), the court may modify any established orders concerning support, maintenance, and/or alimony under a substantial change in circumstances. So, any inheritance your ex-spouse gets changes their circumstances and financial situation, which gives you the right to file a motion with the court to modify the already enforced spousal and/or child support orders.

Therefore, the right question to ask is: “Can I ask for increased support if my husband inherited a house after we got divorced?” The answer is, “Yes, you can try doing so if this inherited house substantially changes his financial ability to pay increased support.”

 

Could a Prenuptial Agreement Help Protect My Inheritance?

A prenuptial agreement, also known as a “prenup,” is perhaps the most reliable way of protecting inheritance from divorce.

Such premarital contracts signed by the spouses before the marriage are administered under the Uniform Premarital Agreement Act outlined in Fla. Stat. § 61.079. If concluded wisely, a prenuptial agreement helps to:

  • Specify the parties’ financial responsibilities;
  • Define the property division in case of death;
  • Save you from your spouse’s debts;
  • Protect any assets from the other party’s claims during the marriage or in case of divorce.

To make it valid, spouses should meet certain conditions stipulated in the Florida statutes. Among other things, a prenuptial agreement should be in written form and signed by both parties voluntarily. Containing details about the spouses’ obligations, ownership rights, personal and indivisible assets, and their disposition in specific cases, it makes a perfect legal inheritance and divorce settlement that must be adhered to by the court when making decisions on property division.

People often refuse to enter into premarital agreements, especially if they are too young and too in love. Many think that divorce and property battles are something that cannot happen to them and get offended when their partner makes a proposition to sign an agreement like that. However, in today’s reality, there’s nothing wrong with creating such settlements, especially if a family business or high-net-worth family property is involved. So, if you want to be sure that your own assets and your children’s future are secured, you should consider entering into a prenup for inheritance protection.