If you receive an inheritance but are also married, the person who passed on an inheritance to you likely intended only to benefit from these funds. If you end up getting divorced, you’re probably left wondering how you can guard the inheritance. Most assets gained by a couple during a marriage are viewed as marital assets, but there are exceptions to this.
Some exceptions to marital property in New York include bequests from the estate of a deceased relative, gifts made to the individual by a non-spouse, and certain types of compensation for personal injuries. Divorce can make how this property is handled complex.
While assets inherited by only one spouse often are not subject to property division during the divorce process, courts have the authority to split inherited amounts if it is determined that not separating these assets would create hardships for the other spouse for children who are the product of the union. This article reviews some of the helpful steps that you or a loved one can follow to make sure that inheritance is protected.
# 1 – Sign a Pre (Or Post) Marital Agreement
A person could enter into a prenuptial agreement before that person enters marriage or agree to a postnuptial agreement after that individual has already entered into marriage. A term of this agreement would emphasize that assets inherited by one spouse as an inheritance during the marriage as well as income created from these assets are the property of only the recipient and not both spouses.
The agreement would additionally waive any rights that a party would have in accordance with state law to funds inherited by the other spouse. In addition to entering into one of these agreements, it’s also a good idea to maintain inherited assets separate from marital assets. While it’s easy to follow through with separation for certain assets like physical property, you should also avoid commingling assets like money in bank accounts that might be more easily mixed together.
# 2 – Avoid Adding Your Spouse’s Name to Asset Titles
You should, by all means, avoid adding your spouse’s name to asset titles or using assets there were inherited to purchase jointly utilized property. This can comingle a court’s view of assets and make it more difficult for the court to determine how to divide assets. If you want to protect assets, you should do your very best to title them separately.
# 3 – Keep Good Records
You should do your best to keep recordings showing that you instead of you and your spouse received the inheritance. The records should include important details including who the inheritance was from, how the inheritance was received when the inheritance was received, and a description of what you did with the inheritance after receiving it.
Contact an Experienced Estate Planning
The distribution of a loved one’s assets in New York state is a nuanced process and if you need help with any area of it, one of the best things that you can do is to obtain the assistance of an experienced estate planning attorney. Contact Ettinger Law Firm today to schedule a free consultation.