When your marriage ends, you may find the division of assets becoming a contentious issue. Questions about how to treat inheritances in divorce proceedings often arise. Although the law may seem straightforward at first, there are nuances that can significantly impact the outcome of your case.
In New York, inheritances are typically considered separate property. This means that they belong solely to you or your spouse who received them and are generally not subject to division in divorce. However, you must understand that this rule is not absolute, and there are important exceptions you need to consider.
Commingling of assets
Mixing inherited funds with marital assets creates commingling. You might deposit inheritance into a joint account or use the inherited money to purchase shared property. In such cases, you risk your inheritance losing its separate status.
Active appreciation
If you are the non-inheriting spouse and you contribute to the growth of inherited assets, you may have the right to a portion of the appreciation. This could involve managing an inherited business or renovating an inherited property, adding value through your efforts.
Intentional change of status
The status of an inheritance can change through legal agreements or clear intentions to share it. A postnuptial agreement or other documented evidence of your intent to treat the inheritance as marital property might be involved.
Protecting your interests
To safeguard your financial future during divorce proceedings, consider these steps:
- Maintain detailed records: Keep comprehensive documentation of all inherited assets and their use.
- Consult an experienced attorney: Seek guidance from a lawyer with a deep understanding of the nuances of high-asset divorces.
- Consider mediation: Explore alternative dispute resolution methods for a more amicable process.
Understanding these aspects of inheritance in divorce can help you navigate the process more effectively. While the law generally favors keeping inheritances separate, each case is unique. With proper guidance and preparation, you can work toward a fair resolution that protects your interests.