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Protect your inheritance, get a prenup

On Behalf of | Jan 13, 2019 | Firm News |

Your parents or grandparents left you something in their wills because they love you and wanted to secure your financial future. What they probably did not have in mind was for you to split that inheritance up during your divorce. However, this does not necessarily have to be your situation.

When you receive your inheritance and how you treat it afterward can influence whether to view it as separate or marital property. If it is separate property, then it is yours to keep and will not have to go through property division. However, if it is marital property, then you could have to say goodbye to some of your inheritance. Here are a few things to keep in mind.

Does before or after marriage matter?

It depends. If you received an inheritance before marriage, then it is generally considered separate property. This is true of most things you own before tying the knot. This does not mean that you should not take necessary steps to protect your wealth, though.

Even if you receive an inheritance while you are already married, it might still be separate property. Unless your parents or grandparents specified your spouse in their wills, then they may have intended your inheritance to be for your use only, and the law will continue to view it that way as well.

Beware of commingling

Regardless of when you got your inheritance, how you treat it plays a huge role in how you will treat it during divorce. Depending on the circumstances, an inheritance can actually make the jump from separate property over to marital property. This generally happens when you commingle the funds.

Commingling usually occurs when an heir deposits his or her inheritance into a joint account and then uses the money for marital expenses. Things like paying the mortgage, purchasing groceries and settling marital debts are marital expenses. If you handled your inheritance in this way, you might still be able to keep the remaining funds as separate property, but you will have to demonstrate that you never intended to share the funds.

A prenup can help

No one can predict the future, which is why protecting yourself, your assets and your financial future is so important. This includes things like inheritances, which you may not have yet but know that you will receive at some point in the future.

carefully constructed prenuptial agreement can protect you in the event that you and your spouse decide to divorce. By setting clear divisions between separate and marital property, and addressing issues such as property division, you can both lay a foundation for open communication but also implement important protections for your future. Crafting an enforceable prenup can be tricky, though, so first consider speaking with an attorney who is familiar with Texas family law.