How to Protect Your Inheritance During a Divorce

In New York, state law divides property into two categories during a divorce: marital and separate property. Marital property includes all assets and debts that either spouse acquires during the marriage. Both spouses own this property jointly, and it must be divided equitably in the event of a divorce. Separate property, on the other hand, belongs to one spouse only and remains with that spouse if the couple divorces. Separate property typically includes any property one spouse owned before marriage. It also includes any gifts or inheritances given to one spouse, regardless of when they received them.

If you receive an inheritance before or during your marriage, it generally remains yours alone in the event of a divorce since inheritances usually qualify as separate property. However, the way you manage the inheritance during your marriage can affect this status. Here’s what you need to know about how you can protect your inheritance in a New York divorce case.

Commingling of Assets

Co-mingling of assets occurs when you mix your separate property, such as an inheritance, with marital property. This mixing can change how courts view your separate property in a divorce. For example, if you deposit your inheritance into a joint bank account and use it for joint expenses, it could legally become marital property. This means your spouse could claim a portion of it in the event of a divorce.

To protect your inheritance, you should keep it in a separate account and avoid using it for marital expenses. Clear financial boundaries make it easier to prove the inheritance remains your separate property. If you want to use some of your inheritance for joint purposes, consider transferring the specific amount you need to a joint account before using it. This is an excellent way to maintain the distinction between the rest of your inheritance as separate property.

The Role of Prenuptial and Postnuptial Agreements

Prenuptial and postnuptial agreements offer a way to protect assets like inheritances during a marriage. A prenuptial agreement is a contract you sign before marrying that outlines what will happen to your assets and debts if your marriage ends. A postnuptial agreement is a similar agreement that you sign after you marry.

These agreements can protect inheritances by formally declaring them as separate property. Having such an agreement can prevent disputes over assets and provide clear expectations for both spouses during the divorce process.

The Importance of Documentation and Proof of Separate Property

Proving that your inheritance is separate property is essential if you want to protect it in a divorce. This means you need clear documentation to show that the inheritance was meant for you alone and not for your spouse. This documentation might include the will or trust document, bank statements, and records of account transactions.

Keeping your inheritance in a separate account with only your name on it is a good practice. Avoid transferring inheritance money into joint accounts or using it for common marital expenses. If you keep your inheritance separate and maintain good records of doing so, it will be easier to prove in court that it should remain your property after the divorce.

How a Divorce Attorney Can Help

Here are some ways an experienced divorce lawyer can help you protect your inheritance during a divorce:

• Reviewing your financial records to identify and categorize your assets
• Drafting a prenuptial or postnuptial agreement that explicitly protects your inheritance
• Documenting the source and ownership of your inheritance before and during marriage
• Negotiating with your spouse’s lawyer to acknowledge your inheritance as separate property
• Filing legal motions to prevent your spouse from accessing your inheritance
• Representing you in court to argue that your inheritance should remain your separate property
• Advising you on the implications of co-mingling funds and how to rectify this if it occurs
• Guiding you on financial decisions that could affect your inheritance during divorce
• Advocating for a favorable division of other marital assets to compensate if co-mingling has occurred

Contact a New York Divorce Attorney Now

Need help protecting your inheritance during a divorce? Connect with Aiello & DiFalco LLP today to arrange a free initial consultation. We’re here to assist you in managing your legal concerns and safeguarding your assets.

Aiello & DiFalco LLP serves clients in Garden City, Hicksville, Long Beach, Massapequa, Nassau County, Suffolk County, Long Island, Queens, Brooklyn, and New York City.