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Your wealth may not consist solely of the financial resources you generate through your work. If your family or close personal friends are well-off, you could find yourself inheriting some or all of their assets upon their passing.
That being said, should you subsequently divorce after inheriting property, you may wonder how the court will treat such property and how you can retain as much of it as possible. Here’s what you need to know.
Separate Property vs. Marital Property
In any New York divorce, the courts must identify the marital property of the parties involved and proceed to divide it fairly and equitably. Generally, any property that either spouse acquires during the marriage is considered marital property. Conversely, any property one spouse acquired before marriage is typically considered that spouse’s separate property and does not need to be divided by the court.
Inheritances Received by One Spouse Are Always Considered Separate Property
Inheritances represent an exception to the general rule. Specifically, any property you inherit will almost always be considered your separate property, no matter when you receive it. Whether you received the inheritance before marrying your spouse or over the course of your marriage, courts will treat it as your separate property.
Challenges of Proving Property Is Inherited
Although an inheritance is treated as a form of separate property, it falls on the party claiming it to prove that it is so. That can be more difficult than it sounds, especially in situations like the following:
- There is no will or other estate planning document identifying you as an heir
- Your relationship with the deceased is distant or difficult to document
- The timing of the inheritance raises the question of whether the property you received was an inter vivos gift (given to you while the deceased was still alive) or an inheritance
- There is an absence of court records
- You deposit your inheritance into a joint bank account with your spouse
Suppose that you can surmount these problems and show that the money or other property you received is an inheritance. In such a case, courts will not divide (or even consider) that property when dividing other marital assets.
Ways to Protect Your Inheritance
How you handle your inheritance after receiving it will play a significant role in how easy it is for you to leave the marriage with the entire amount of it intact. For example, keeping your inheritance separate from any other marital property can help establish the amount of inheritance you received as well as the fact that it is truly an inheritance and your separate property.
Gather copies of any court or estate planning documents identifying you as an heir or recipient of the decedent’s assets. Such documents, if available, can also identify when you came into possession of this property and establish that the distribution was not a gift.
Lastly, keeping your inheritance and anything you spend it on separate is also important. For example, if you use your inheritance to purchase a home, do not put your spouse on the home’s title. Doing so could transform the home into marital property and make it subject to division, even though it was purchased with your inheritance.
Enlist the Help of a New York Property Division Lawyer From Aiello & DiFalco
Should you find yourself involved in a divorce, an experienced Garden City divorce lawyer from Aiello & DiFalco can help you protect your property. Where documentation of an inheritance is sparse, our knowledgeable and resourceful team may recommend forensic accountants or other professionals who can help supply the information the court needs to treat your inheritance appropriately. Contact our team today to schedule a divorce consultation to discuss your needs.