New York residents may be interested in learning about the treatment of inherited assets in marital property division. Property belonging to married spouses is considered to be either marital property or separate property. Separate property is defined by a few general rules. Property inherited or gifted by a third party to either partner, lawsuit settlements and property owned before the marriage or received after the date of separation is usually considered separate property. Property specifically reserved by a prenuptial agreement is also protected from becoming marital property.
The division of marital assets depends on several factors. The state in which the divorcing couple resides may be a community property state, such as California, Idaho, Arizona, Texas, Nevada, New Mexico, Washington and Louisiana. Marital assets are divided equally in those states. If the couple lives in an equitable distribution state, however, marital property is divided to be fair and equal, which may not necessarily mean 50/50.
Even inheritances and other assets designated as separate property may be subject to division at divorce, however. If the property has been commingled with marital assets by being placed in a joint account or used towards a joint purchase or there is a question of a gift being made to the couple instead of one party, it may be considered to have become marital property. This means it may be subject to division according to the laws of the state.
Divorce can become acrimonious, and asset division may be seen as a way to punish an ex-partner. Obtaining advice from counsel experienced in divorce, family law, child custody and support strategies may help facilitate a fair and equitable settlement and division of marital property.
Source: Forbes, “Divorcing Women: Here’s How to Protect Your Inheritances And Gifts“, Jeff Landers, August 19, 2014