When our clients come to us to file for divorce, they’ll naturally have questions about how their assets are to be divided. If a client received an inheritance during the marriage or if they anticipate one during the divorce, they’ll often want to know if the inheritance is subject to division under Florida’s equitable distribution laws, which apply to the division of marital assets in a Florida divorce.
A spouse can receive an inheritance before or during a marriage. Often, when an inheritance is received during a marriage, the receiving spouse will mix it with marital assets because they don’t anticipate a divorce down the road. In this article, we address how inheritances are treated in a divorce.
Are Inheritances Separate or Marital Property?
Under Florida’s equitable distribution laws, only marital assets are subject to division in a divorce. Generally, marital assets refer to all assets, income, and property acquired during the course of marriage regardless of who earned the money or whose name is on the title.
For divorce purposes, inheritances bequeathed to one spouse alone are considered to be “separate property” and therefore not subject to division in a divorce, but there are exceptions to the rule. If a spouse comingles the inheritance with marital funds or if they use it to pay off marital debt, then the inheritance loses its status as separate property.
For example, if a wife received an inheritance of $100,000 during her marriage and she deposited it into the joint bank account that she shared with her husband and the couple used those funds to pay off their auto loan and credit card debt, the inheritance becomes a marital asset because it was commingled with marital funds. Likewise, if the couple used the money to renovate their home or pay off their mortgage, it can lose its separate property status once again.
The same goes for inheritances received before the marriage. Let’s say the same woman received the $100,000 inheritance six months prior to her wedding, but upon marriage, she moved the money into a joint bank account with her husband. Now, the funds have been commingled. If she had kept the inheritance separate, the inheritance would have remained separate property and would not be subject to division in a divorce.
The lesson to be learned is to keep inheritances separate and to not comingle them with marital funds, whether they’re received before or during the marriage. If the inheritance is substantial, the best way to protect it is to enter into a prenuptial or postnuptial agreement that clearly identifies the inheritance as separate property in the event of a divorce.
If you have questions about how your property will be divided in a divorce, contact Schuttler, Greenberg, & Mullins, LLC to work with board-certified specialists in divorce law!