When someone you love has passed away and left you an inheritance, they meant for it to be for you, not your future ex-spouse. But what happens to that inheritance if you and your spouse decide to call it quits?
During a divorce, there is a chance there will be a debate about whether or not one spouse has a legal right to an inheritance that the other spouse received during the marriage. Things can get even more complicated if the inherited funds get mixed with marital assets along the way.
Understanding how the courts handle the division of property in a divorce and how your inheritance may be at risk can give you an idea of what to expect during the divorce proceedings. We will discuss how the state of Tennessee handles marital property and how your inheritance fits in.
The state of Tennessee is an “equitable distribution” state. That means that, unless there is a prenuptial agreement, the court must fairly divide the marital property. There are two different types of property considered: marital and separate.
Marital assets are the only assets that get separated during a divorce. Per Tennessee Code § 36-4-121, marital assets are real and personal property, tangible and intangible, that both spouses acquired during the marriage and up to the date that the divorce is final.
Separate property is any property that will remain with the individual after the divorce is final. Separate property can include the following:
Typically, in Tennessee, it doesn’t matter if a spouse receives an inheritance before or during the marriage, it is considered separate property. And although the courts don’t consider your inheritance as marital property, you should keep in mind that they will take that into consideration when dividing property. So if you have received a large sum of money, you may receive a smaller share of the marital property in your divorce.
There are also cases in which your inheritance can be considered marital property. It all depends on what you do with the money during your marriage. Here is an example of how an inheritance could be considered marital property.
You receive an inheritance and deposit the funds you received into a joint savings account that both you and your spouse own. Then, you and your spouse both contribute funds to that savings account through the years. Now the money from the inheritance has been co-mingled with marital assets. After being co-mingled with marital assets, your inheritance will no longer be considered separate property.
The simplest way to prevent co-mingling is to have a prenuptial agreement in place detailing who gets what in case of a divorce. Typically, prenuptial agreements are upheld in court even if the funds have been co-mingled.
If you received your inheritance after you were already married and a prenup is not in place, make sure that the inheritance is never co-mingled with a joint account or used for marital expenses. The best way to do this is to deposit any funds you receive into an account that is only in the beneficiary’s (your) name.
Laws regarding inheritance can be challenging to understand, especially when it comes to a divorce. Because of this, having an experienced divorce attorney who can guide you through the process is vital.
Attorney Hunter Fowler has the experience and resources needed to provide you with the best legal counsel possible. Hunter handles both contested and uncontested divorces. He is knowledgeable about the divorce process and will guide you step by step through the process and make it as seamless as possible.
If you’re ready to work with an attorney who genuinely cares about you and will fight for you, contact Hunter today for a free consultation.
