When couples get divorced, one of the first things they do is separate their possessions into personal assets and marital assets. A marital asset is owned by both people, often because they purchased it or acquired it after they got married. A separate asset is something that one individual owns personally, which they may have brought into the marriage and do not have to share with their spouse.
One potential area of conflict is an inheritance. Say that a woman is given a $1 million inheritance from her parents. She believes she should keep the entire million dollars in the divorce, but her husband argues that he’s entitled to $500,000. Does the inheritance count as a separate asset or a marital asset?
It depends on the situation
Unfortunately, the answer is that it depends. There are cases where an inheritance is a separate asset, and it often begins this way. If someone receives an inheritance during their marriage, it is initially a separate asset because it is a gift to them individually. Even though they’re married, it’s intended just for them—not for their spouse.
However, certain actions can commingle this inheritance with other marital assets, turning it into a marital asset itself. One example is using the inheritance to buy a shared asset, like a home or a business. Another example is allowing a spouse to access that inheritance or storing it in shared financial accounts. Once both people are using the money, it may become a marital asset that they have to divide.
This can certainly become complicated during a divorce, especially when couples don’t agree. They must know what legal options they have.