SmartAsset reported the average inheritance in the U.S. as of 2023 was $46,200 with the top 1% receiving an average of $719,000. Regardless of how much you may inheirt, it is essential to safeguard it in the event you get a divorce.
When you are dealing with the potential loss of an inheritance, it can add another layer of stress to the ending of a marriage.
Understanding separate property
In most cases, inheritances are separate property, meaning they belong solely to the inheriting spouse. This distinction is important because seperate property remains with the individual owner and does not face division in a divorce.
Maintain clear documentation
To safeguard your inheritance, you must maintain clear and organized documentation. Keep records of all documents related to your inheritance, including wills, trust documents and any correspondence with the person who left you the inheritance.
Avoid commingling funds
One common mistake is commingling inheritance funds with marital assets. When you receive an inheritance, deposit it into a separate account in your name only. Mixing these funds with joint accounts can make it challenging to distinguish separate property during divorce.
If you have already commingled, it might be necessary to hire a professional appraiser or financial expert to determine the exact value of your inheritance.
In some cases, it may be beneficial to have a transmutation agreement in place. This legal document can specify that your inheritance remains separate property, not subject to division in the event of a divorce.
Pre-nuptial or post-nuptial agreements
If you have concerns about the potential loss of your inheritance in the future, consider a pre-nuptial or post-nuptial agreement. These legal documents can outline the treatment of your inheritance upon divorce.
Protecting your inheritance in a divorce requires proactive steps and careful management of your assets. It is possible to retain an inheritance if you take the right actions.