When dealing with inheritance in marriage, many people wonder whether their spouse is automatically entitled to the assets they inherit. Inheritance laws vary based on location, whether there’s a will in place, and how the assets are managed during the marriage. Understanding how inheritance is treated in a marriage can help you make informed decisions about protecting your assets or sharing them with your spouse.
Is an Inheritance Separate or Marital?
An inheritance is generally considered separate property, which means that it belongs solely to the individual who received it. This rule applies even if the inheritance is received while you are married. However, this isn’t always straightforward. There are situations where an inheritance can become marital property, which means both you and your spouse might have a claim to it.
In community property states, marital property is typically shared equally between spouses. But when it comes to inheritance, as long as it is kept separate from marital funds, the inheritance remains solely yours. However, if the inheritance is mixed with joint assets, it can be considered marital property and divided during divorce or death.
Can My Spouse Get Part of My Inheritance?
While the general rule is that an inheritance is considered separate property, there are several ways in which your spouse could become entitled to a portion of it. Below are some common scenarios where your spouse may have access to your inheritance:
- Commingling of Assets: If you deposit your inheritance into a joint account or use it to make joint purchases, such as buying a home, the inheritance may be treated as marital property. In this case, your spouse could claim a portion of it during divorce or after death.
- Using Inheritance for Family Expenses: If your inheritance is used to pay for family-related expenses like a mortgage, home improvements, or your children’s education, it might be seen as part of the shared marital assets.
- Living in a Community Property State: In community property states like California and Texas, both spouses equally share the property acquired during marriage. If the inheritance is not kept separate from other assets, it might be divided equally in case of a divorce.
- Elective Share: Many states offer an “elective share” that allows a surviving spouse to claim a percentage of the deceased spouse’s estate, regardless of what is written in the will. This percentage varies by state but is typically between 1/3 and 1/2 of the estate.
- Lack of a Prenuptial Agreement: Without a prenuptial agreement, the court may have more discretion in determining whether your spouse is entitled to a portion of your inheritance, especially if the inheritance has been mixed with marital property.
How Can You Keep Your Inheritance Separate?
If you want to ensure your inheritance remains your separate property, there are several strategies you can follow. These precautions help protect your inheritance from becoming part of the marital assets:
- Keep Inheritance in a Separate Account: One of the simplest ways to keep your inheritance separate is to deposit it in a personal account under your name only. Avoid mixing it with any joint accounts that you share with your spouse.
- Avoid Using Inheritance for Joint Purchases: When you use your inheritance to make major purchases like a house or car that you and your spouse will both use, that asset can become marital property. Keeping your inheritance separate means not using it for joint purchases.
- Create a Trust: Establishing a trust is a legal way to protect your inheritance. A trust ensures that your assets are managed according to your wishes and helps prevent them from becoming marital property.
- Document How You Use Your Inheritance: Keep detailed records of how you spend or invest your inheritance. If you’re ever questioned in court, having this documentation will help demonstrate that the assets are separate from marital property.
- Consult with a Lawyer: A legal expert can provide guidance specific to your situation and jurisdiction. They can help you set up the proper agreements or accounts to ensure your inheritance is safeguarded.
What’s the Most Effective Way to Share Your Inheritance with Your Spouse?
Even though there are ways to keep an inheritance separate, some individuals may want to share it with their spouse. Here are a few approaches to effectively and fairly share your inheritance:
- Establish a Joint Trust: A joint trust can allow you to share your inheritance with your spouse in a way that protects the assets for both of you. This is ideal for long-term financial planning as it can cover both spouses’ needs.
- Set Up a Shared Account for Specific Expenses: If you want to share your inheritance, consider depositing a portion of it into a joint account specifically for shared expenses, like vacations or family-related costs. This gives you control over how much you’re sharing.
- Gifting Part of the Inheritance: You can choose to gift a portion of the inheritance to your spouse. This can be done formally to ensure that both parties understand what assets are still separate and what are shared.
- Invest in Family Assets: Using your inheritance to improve or invest in assets that benefit the family, such as buying a larger home or improving your current property, can be a meaningful way to share the inheritance without fully commingling all assets.
- Update Your Will: If you want to make sure your spouse receives part of your inheritance upon your death, updating your will to reflect these wishes is crucial. This ensures clarity in how your assets will be divided.
Managing Your Inheritance in Marriage
Effectively managing your inheritance in marriage requires careful planning. Whether you choose to keep your inheritance separate or share it with your spouse, understanding how inheritance laws work is crucial. By keeping your inheritance in a separate account, documenting its use, or creating a trust, you can prevent your assets from becoming marital property. Alternatively, sharing your inheritance with your spouse through joint trusts, gifts, or shared investments can strengthen financial unity within the marriage. Always consult a lawyer to protect your interests and ensure your inheritance is handled according to your wishes.