Law Offices of Matthew S. Schultz, P.C.
480-900-6032

Will divorce affect your claim to your inheritance funds?

If you inherit or stand to inherit property and assets after the death of a loved one, you may wonder what claim, if any, a spouse may have to these items. If you end up facing divorce, will your spouse be able to take a portion of the funds? Since your family gifted the inheritance directly to you, isn't it automatically your own separate property?

In Arizona, a community property state, each spouse receives an equal share of the marital funds. Luckily, in most cases, an inheritance is separate property, whether you get the funds before or during the marriage. There is one caveat, however. If you commingle the funds, you could lose a claim to the property.

Community property and separate property

At the end of a marriage, you and your soon-to-be ex will most likely have a conversation about how to divide your assets. If you two cannot reach an agreement independently, the assets are divided according to state law. A judge will evaluate your marital assets versus your separate assets.

Marital community property is essentially the money and assets that you and your soon-to-be ex shared while you were together. Separate property is money and assets held independently, either from before the marriage or during. A prenuptial agreement can allow you to establish certain items as separate property that would have otherwise potentially qualified as marital property.

When inheritance is separate property

Inheritance is separate property unless the deceased individual gifted it to you and your spouse jointly. For example, if an aunt left you a check and did not mention your spouse even though she knew you were married, that inheritance is separate property. There is a circumstance in which the inheritance may become marital property, however.

Commingling of the funds

When the mixing of inherited funds with marital funds occurs, they become commingled. Once the commingling of separate funds takes place, they then qualify as marital property. A person may commingle the funds by placing them into a joint bank account, or by using them for improvements to jointly held assets such as the marital home. Once the funds are mixed, it can be difficult or even impossible to make a claim that the money is separate and should not be shared with an ex during a divorce.

Where to find support for these issues

No matter your situation, you may have a myriad of different reasons for wanting to take steps to protect your assets. If you stand to inherit, you may wish to create a prenuptial or postnuptial agreement that establishes your inheritance as your own separately held property. If you are facing divorce and you are in the process of determining what property qualifies as marital and what property qualifies as separate, it can be a rather challenging process and your soon-to-be ex may not agree.

For these and other related issues, acquiring the services of an experienced family law attorney may be an important step toward achieving the best possible outcome for your future.

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Law Offices of Matthew S. Schultz

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