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Can your inheritance be considered marital property in a divorce?

On Behalf of | Aug 9, 2021 | Family Law

If you are going through a divorce in Michigan, you will have to contend with your property being divided between you and your spouse. Of course, there is a difference between property you owned before your marriage and property you acquired after. You may wonder what can happen if you got an inheritance and whether it will be included in property division.

What is the difference between community and separate property?

Understanding the way family law works with how community property and separate property are handled can give insight into what happens to an inheritance as well. Community and separate property have differences. Community property is the property that both spouses own, which means that it is divided if the couple gets a divorce. Separate property, on the other hand, is the property that only one spouse owns and is not divided in the event of a divorce.

Assets and income one spouse acquires during the course of the marriage are considered community property. This means that if you get a divorce, your spouse will receive a share of those things. However, if you receive an inheritance, it’s a special situation. You may be able to keep your inheritance for yourself whether you received it before or after you got married if it’s not commingled with your marital property.

What is commingled property?

Per family law, the commingled property consists of assets and money that both spouses own jointly. It’s considered property that is available for both parties to use to pay for expenses. An example of this type of property is a joint checking account that both spouses contribute to for paying monthly bills.

As a result, if you deposited money that you inherited into that account, it would then be considered commingled and could be divided between you and your spouse if you divorce.

If you deposited a cash inheritance into your own separate bank account, however, it would belong to you alone. Your spouse would not have access to any of the funds during your divorce.

Considering the factor of intent

The court will consider the factor of intent when it comes to an inheritance during a divorce. For instance, if you have an inheritance but want to keep it separate from your spouse, you would have documents and statements showing how your cash inheritance has been used. This would also show that you intended to keep the inheritance separate. For example, if you used part of the funds to buy something personal, for you only, rather than on something that both you and your spouse could benefit from, it would be proof for the court.