“Divorce” and “inheritance” are two words that most people want to avoid when thinking about their marriage. Unfortunately, this is not always possible. Divorce is common and divvying up your life during or after can be a stressful process.
It’s made even more difficult when you do not know if you have to split certain assets such as inheritance funds.
Fortunately, we want to help you be prepared if you are considering a divorce or going through one. This guide will explain what you need to know about inheritance funds, how property is divided after a divorce, and what a divorce attorney can do for you.
What Constitutes an Inheritance
An inheritance is a financial term that describes the types of assets passed down to others after an individual dies. This often impacts joint and personal finances because it can include substantial amounts of cash, stocks, bonds, jewelry, cars, antiques, art, real estate, and other tangible assets.
Each inheritance’s value can thus be appealing to both parties in a divorce, as one person might see the monetary value as something they should get to share.
The Law on Divvying Up Property During Divorce
Virginia is with most states in that it follows an equitable division method following a divorce. This means that if a couple cannot agree on a fair division of property, the court will decide what is fair based on a hearing or trial that will look at the entire picture of the couple’s finances.
This court-decided division, also called “equitable division,” does not necessarily mean the judge will split everything equally, however. It’s important to note that the judge can divide the property however they see fit after examining all the evidence.
Married Property vs. Separate Property
Another essential factor that will impact how a couple’s property is divided is whether the property belongs to the marriage or spouse. A couple of definitions to keep in mind:
- Married Property
This is property that is acquired or earned by either spouse during the marriage.
- Separate Property
This is property that belonged to one spouse before the marriage. It can also include property given by gift or inheritance to one spouse during the marriage.
A piece of property may start as separate property, but the court can consider it part of the division if the couple uses the property to benefit their marriage. That makes being able to rationally present your case about the inheritance all the more important.
Typically, the most common types of assets divided in a divorce include family homes, personal property such as jewelry, or intangible property such as retirement benefits, dividends, and income.
The court will also take into account the couple’s marital debt, however, which means that if either spouse acquired debt, the court will order that spouse to pay it. Debt incurred as a couple will likely result in both spouses being responsible for repaying it.
The Factors that Affect Property Division Decisions
There is no easy way to determine how a court will divide property following a divorce, as there are several factors the court will analyze to make this decision. These factors include:
- How much each spouse contributed to the well-being of the family, including monetary — property, income, funds for the benefit of the marriage — and non-monetary contributions, such as homemaking or child-care services
- How long was the couple married
- The age of the husband and wife and their mental and physical condition
- When and how the couple acquired their marital property
- Debts and liabilities of the husband and wife
- The tax consequences of the property
The court can also consider the couple’s specific behavior when making their decision. For instance, if one of the spouses abused the other or had an affair, their bad behavior can indicate they were at fault in the marriage and their actions can impact how the court divides marital assets. Additionally, the court can increase the other spouse’s share if one spouse does something to depreciate the marital property.
What to Know About Your Inheritance and Divorce
The Virginia Code indicates inheritances from third parties are separate property, but this does not mean a spouse will not have to share their inheritance with their significant other in a divorce. In Virginia, separate property can become marital property if either spouse commits the following actions:
This includes putting together or mixing assets, like depositing a cash inheritance into a joint bank account. When this occurs, this inheritance may be subject to division by the court in divorce proceedings.
Personal Efforts by a Spouse
If one spouse inherits money but uses the funds to build a stock portfolio and then spends their own time actively managing that portfolio, they have inadvertently converted this money from separate property into a hybrid property.
When a spouse converts their separate property into hybrid property, the court will need to look into how much of it is marital based and how much is separate before dividing it.
Protecting Your Inheritance
So, how can spouses protect their inheritance from becoming marital or hybrid property? They will need to take the following steps:
- Keep inheritance funds in a separate account separate from their marital funds
- Not use any of their inheritance for the benefit of their marital property
- Keep any inherited real property in their name only
- Avoid using their own personal efforts to increase the value of any inherited property during the marriage
As a general rule, it is recommended that individuals create prenuptial agreements before they say “I do” when they receive an inheritance before they are married. This can ultimately protect any inheritance that is entering the marriage.
Contact the Experts for Help with Your Virginia Divorce
Inheritance assets being involved can make divorce even more taxing and frustrating. Fortunately, you do not have to go through this challenging ordeal on your own. An experienced divorce attorney can help you get the legal help you need, the answers you want, and the best options to fight for the property and assets you deserve. Your divorce doesn’t have to be difficult and long just because inheritance is involved.
If you live in Virginia and are considering or going through a divorce, contact our office today to speak with a knowledgeable divorce lawyer about any inheritance and divorce questions you might have. Our team is happy to help you work through all the tricky aspects of your separation agreement and make sure you’re set up for your best opportunity to start fresh.