Money is not only a currency for making purchases. Property is not just a structure you live in or a bracelet on your wrist. Assets have emotional ties that can become even stronger when you fear you might have to part with them in a divorce.
Inheritance is given to you by a loved one. What they handed down to you is a precious reminder of that relationship. Fortunately, New York’s equitable distribution law generally protects inheritance but there are some exceptions.
If you have inherited anything of value or you expect to, there are steps you can take to protect it from a current or future divorce proceeding. Our attorneys at the Law Office of Dennis R. Vetrano, Jr., LLC have more than 75 years of experience handling complex cases.
Inheritance as Separate Property
When a judge determines how to divide property in a divorce, they only distribute marital property. New York views inheritance gained during a marriage like it does assets owned before marriage. Inheritance is protected from distribution if it was designated for one spouse and not for the couple jointly.
Keep in mind that the court will require that you prove the inheritance is yours alone. The language of the original bequest should state the property was left to one spouse. If evidence indicates the property was bequeathed with the intent of benefiting both individuals in a marriage, the assets could be considered marital property.
Proving that inherited assets you deposited into a joint banking account should remain separate can be difficult.
Keep Separate Property Separate
Like other assets, your inheritance can be at risk if you co-mingle it with marital property. Using an inheritance to pay for the mortgage on joint property or to take a vacation together, courts may determine what was once separate is now marital property.
We recommend that the inheritance is always kept separate.
- If you inherit a home, do not include your spouse on the deed.
- Do not use marital funds to make repairs on the home.
- If you sell the home, do not use the proceeds for a new joint purchase.
- Inherited money should go into a separate account in your name and not be used to pay for joint expenses or to support a dependent spouse.
- Stocks and bonds should remain in a separate account in your name only.
Make sure to keep all documentation related to the inheritance. Any transactions should be carefully cataloged. The paper trail may be crucial to convincing a judge that it is truly separate property belonging to you.
Prenuptial or Postnuptial Agreements
Using a prenuptial or postnuptial agreement to declare that an inheritance is to remain separate strengthens your case should you divorce. Inheritance and other property can always be provided to your spouse in a will.
Create a Trust
When you create a trust, any asset put in the trust is technically owned by the trust. It will not be considered marital property. Assets owned by the trust are also protected from other creditors. There are several different types of trusts. Irrevocable trusts offer a strong layer of protection, but it also means you cannot pull the money back out. Your attorney can best help you weigh the pros and cons of creating a trust of any type.
Legal Advice for Protecting Inheritance
Your inheritance is a connection to your loved one. Whether you have already received an inheritance or expect to receive one in the future, you can protect it from any potential divorce proceeding. Call on our skilled lawyers to help you insulate your inherited assets from becoming marital property.
The initial consultation is free and confidential. To schedule, call us at (845) 605-4330 or submit our online form. We serve Dutchess, Orange, Putnam, Rockland, Ulster, and Westchester counties.