Inherited Assets in a Florida Divorce
Inherited assets normally remain the property of the person who received the inheritance. Some exceptions can change that, however, including whether the assets were commingled with marital assets or whether the assets were used to support the marriage. When the couple undergoes a divorce, the spouse who receives an inheritance of the assets may consider those assets to be his or hers alone.
Florida is an equitable distribution state, which means marital property is divided fairly. The question arises, however, what is fair? This is especially true if the divorce is contentious. If the couple doesn’t agree on the division, a judge will make the decision.
What Are Marital Assets
Marital property includes assets shared by both parties, like joint bank accounts, a house, or a car used together.
What Is Separate Property
Separate property – or nonmarital property – can include the following:
- Part of an award for personal injury.
- Repayment for lost earnings.
- Assets acquired by a spouse using non-marital assets, and kept separate from marital property.
- Any assets and property agreed as being nonmarital through a prenuptial or post-nuptial agreement.
- Any bequest or inheritance to one party before or during the marriage is separate property. If the inheritance becomes commingled with marital funds, it can become marital property.
- Gifts given to one spouse before or during the marriage, not shared jointly or used for the other’s benefit.
How An Inheritance May Become Marital Property
During the marriage, both spouses use the car and house, with marital funds used for repairs, mortgage payments, and improvements. In divorce, the judge may consider them marital property due to joint use and enhancement with marital funds. The non-inheriting spouse may have a claim unless property arrangements were made.
The most logical way to protect personal property is to not commingle it with marital property. If the inheritance is in place before the marriage, a prenuptial agreement should prevent it from becoming marital property. If the inheritance is received during the marriage, a postnuptial agreement can be drawn up to protect those assets. When there is no agreement, the inheritor needs to take copious precautions and prevent commingling said personal property.
You should diligently keep personal assets separate from marital assets. Avoid keeping them in a joint account or using them for marital expenses, like a jointly-named mortgage.
Using personal assets to enhance marital assets, such as repairing the marital home, may be seen as commingling funds. In case of already commingled inherited assets, they can be traced to determine separate and marital percentages.
Can an Inheritance Affect Alimony
Even if an inheritance is protected as personal property during divorce, it can still impact alimony payments. In Florida, it may be seen as a sign of higher earning capacity, especially if significant and the recipient is unemployed. The court may order you to pay more alimony than it might otherwise have.
What if the Value of the Inheritance Changes
Assets and inheritance can increase in value. You may have inherited a house that had X value when you received it and was non-marital property. Over the span of a few years, you and your spouse spent marital assets improving the house, increasing its value considerably. The difference in value – the increase – becomes a marital asset. A judge may determine to split the increase in value while the inheritor of the house retains the house at the inheritance value.
Gifts Given to Each Other During the Marriage
If one spouse gifts his or her partner with presents during the marriage, this is marital property. In other words, if one spouse gives the other spouse $100,000 worth of jewelry, these gems can be considered marital property during the divorce settlement. This may contradict the concept of a “gift,” but that is simply how the court will view it.
Issues Regarding Assets to Keep in Mind
During a divorce, a once-in-love couple can become consumed with bitterness. The wealthier of the two partners may well be tempted to hide assets out of spite. That is indeed a bad idea and should be avoided. If the court finds out, it will punish the deceiving spouse. It is critical to be absolutely honest with your attorney about all assets and let him or her decide on the best way to legally protect them.
Inherited property can have value, and it can also have tremendous sentimental meaning. In the event of a divorce, spouses want to assure that an inheritance to them personally is well protected from a division of assets by the court. This can be done by keeping personal and marital assets separate from each other, and a family law attorney can help you determine the best way to do so.
The legal process can get difficult, which is why we always recommend that you seek the assistance of counsel; or at least have a consultation. Schedule a consultation with one of our attorneys today to review the issues of your case, the legal options you may have, and certain rights that pertain to your unique situation.
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