Fabio & Merrill

Inheritance, divorce and "commingling" assets

Imagine your uncle Frank left you a sizable inheritance. The money was a surprise and an important boon that helped you get through a financial rough patch. Now that you're getting a divorce, however, your soon-to-be ex wants a piece of the inherited assets that remain.

Does your spouse have the right to receive part of Uncle Frank's inheritance money? In some cases, your spouse might be able to take some of the money. In other cases, you will keep all of it. The answer depends on what you did with the money after receiving it.

Did you commingle your inherited assets?

The question of whether you "commingled" your inherited assets is an important one for the purpose of determining if your spouse gets to keep part of it during your divorce. Regardless of whether you received your inheritance before or during your marriage, the question of whether you commingled it is key.

"Commingling" happens when you deposit your inheritance money into a joint account. That serves to mix your inheritance money -- which began as separate property -- with your marital estate. After commingling happens like this, your inherited assets that were mixed into the marital estate will be divisible as if they were owned by you and your spouse together.

Commingling can also happen if you used the inherited assets to benefit the marital estate or your marriage. For example, if you use your inherited assets to make improvements on a jointly owned piece of real estate, this will serve to commingle those assets into the marital estate. In other words, you will not be able to claim sole ownership of the investment made into your family home.

Handle your inherited assets with care

Many spouses lose their individual property rights that pertain to their inherited assets as a result of commingling. If you wish to keep an inheritance for yourself, and not have it absorbed by your marital estate, make sure you fully understand the nuances of marital property law as it pertains to inheritances in the state of Texas.

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