The divorce process can be time-consuming and arduous. It involves many details that may not have come to your mind before the divorce. One of the biggest issues that may come up in your divorce involves splitting up your property. The question of whether your spouse will be included in a portion of your inheritance could become a major issue in your divorce.
Texas residents who are going through a divorce need to know how to protect the gifts and inheritance they have received during their separation. Protecting your inheritance during a divorce can be complicated, and it usually depends on whether the assets are considered separate or marital property. In most cases, the law is in the favor of the spouse who inherited property or gifts. Usually, the spouse who inherited the gifts will be able to keep them during the divorce and after the divorce because they are considered separate property, but this is not always the case.
Inheritance is Usually Considered Separate Property in Texas
In Texas, any assets that a person owns before they were married or were gained after the divorce are considered separate property. Gift and inheritances are included as well as any payments someone receives for pain and suffering due to a personal injury lawsuit. Additionally, any property designated as separate property in a premarital agreement is considered separate property. All other property that one or both spouses acquired during the marriage is considered marital property.
Texas is a Community Property State
Texas is a community property state. As a result, marital property is jointly owned by both spouses and is usually split 50/50 in divorce proceedings. Any property that one or both spouses brought into the marriage that is not separate property is considered community property. In Texas, all community property will be divided in half during the divorce process. The husband will keep 1/2 of the marital property and the wife will keep the other half. Each spouse will keep his or her own separate property in full. The court has the power to distribute assets and whatever way it considers to be fair and equitable for both spouses.
If you want to protect an inheritance that she received, you will need to show that it is separate property and not eligible to be divided by the court. When a large inheritance is involved, spouses might argue back and forth as to whether the inheritance is separate or marital property. The spouse who did not receive the inheritance may try to claim that the inheritance is marital property so they can obtain half of the inheritance during the divorce.
Consequently, the real key in determining whether the inheritance or gift is marital or separate is whether or not it has been commingled during the marriage. For example, a spouse may be able to protect gifts and inheritances if they have kept the assets in a separate account that belongs to only one spouse. However, if the assets are deposited into a joint account or used to purchase property that will be enjoyed by both spouses, the court will most likely determine that the assets are marital property.
Protecting Gifts and Inheritance During a Divorce
Inheritance can become complicated if you and your spouse used the funds jointly. This is called commingling, and it can complicate the process of dividing up the inheritance between the two spouses. For example, suppose one spouse inherited a large sum of money. The spouse deposited the inheritance into a joint bank account that both spouses use on a daily basis. The spouse decided to use the inheritance for marital expenses, like paying off credit card debts, making house repairs, and making the car payment. When this type of commingling happens, it can mean that the inheritance loses its immunity.
The inheritance may be considered as marital property by a court and no longer protected as separate property. Commingling can complicate things, but there are some ways that you can protect and redeem some of your inheritance so it will be considered separate property by the court. One way of doing this is to trace your assets and figure out the amount that belongs to you solely before it became commingled. You can also safeguard your inheritance as separate property by getting a prenuptial agreement before you get married. If you have not gotten a prenuptial agreement, you are already married, and considering divorce, there are a few things you can do to try to protect your separate property, including your inheritance, such as:
- Keep your inheritance funds in a separate bank account
- Keep any real estate separate
- Use non-marital funds on non-marital property
Proving That Your Inheritance is Separate Property
Suppose you have already commingled your inheritance. There are still ways to prove to the court that your inheritance was initially separate property. However, you will need to show that it is separate property with clear and convincing evidence. You can do this by establishing that the inheritance belonged solely to you before the marriage. Provide documentation, such as a copy of the will that shows that you inherited the money in question. You should also provide a paper trail that will show all of the withdrawals and deposits into your joint account. The paper trail will also show whether your inheritance was used in marital matters.
Contact Divorce Concierge Today
Attempting to show that your inheritance has not been commingled can become complicated. Due to the nature of difficulty that can accompany an inheritance that has been commingled, we recommend seeking an experienced divorce attorney as your next step. It is essential to stay organized and make sure that you have a complete record of the property you would like to prove is separate property.
Doing so will help you avoid any confusion regarding property ownership as you look toward divorce. Additionally, you may be able to agree in writing to designate certain types of property as separate so you can keep the lines of ownership from being blurred. Contact the divorce attorneys at Divorce Concierge today to schedule your free initial consultation.