Is My Inheritance Separate Property?

 Posted on June 04, 2024 in Division of Assets

Generally, when a married person receives an inheritance, it is his or her separate property. Inherited money or property is excluded from the definition of marital property, which includes nearly anything either spouse acquires during the marriage. Inheritances are treated a bit differently under the law when it comes time to divide marital assets. When your family member or loved one chose to leave you an inheritance, she clearly meant for you to be the one to benefit from her gift. Otherwise, she would have named both you and your spouse in her will or trust. However, parts of your inheritance can become marital property if you commingle those assets with your marital funds. If you are getting divorced, a Naperville, IL divorce attorney can help you take steps to protect your personal inheritance.

What Counts as an Inheritance? 

Your inheritance can include anything you receive by gift, legacy, or descent. This includes:

• Property distributed to you through a trust, 
• Intestate property allocated to you by a probate court, 
• Property you received through a Transfer on Death Instrument, and
• Anything left to you in a will. 

There can be some crossover between gifts and inheritances. Both are your separate property. For example, say your father inherits his mother’s entire estate. Your father chooses to write you a check “from grandma” as a way of sharing the inherited wealth. This would be legally considered a gift rather than an inheritance, but it is still your separate property.

What Are Commingled Assets? 

If you commingle your inheritance with your inherited property - which nearly every married person does to some extent - the commingled assets can be considered marital property. Commingling refers to sharing an asset with your spouse or using the asset to benefit the marriage. Examples include:

• Depositing the inheritance into a joint bank account and using it for marital expenses, 
• Putting inherited money toward a joint purchase, like a down payment on a marital home that your spouse also contributed money toward, 
• Moving into a house you inherited with your spouse and children and living there during the marriage, or
• Using a portion of your inheritance to buy a vehicle both you and your spouse use. 

When it is time to divide commingled assets, the court can consider how much each spouse contributed to the asset. Each spouse’s contribution to an asset is an important factor during the equitable division process.

Contact a DuPage County, IL Division of Property Attorney

Calabrese Associates, P.C. can work to help you protect your inheritance and other separate assets during the divorce process. Experienced Naperville, IL divorce lawyer Michael J. Calabrese is a former chair of the DuPage County Bar Association Family Law Committee. Contact us at 630-393-3111 to arrange a confidential consultation.