When a loved one leaves an inheritance, they intend for it to be the beneficiary’s money. If that person gets married, the inheritance may end up being divided between the spouses as an asset. Many people with inheritances want to retain that money as their own in the event of a divorce. In the state of Indiana, there are a few things to know about how to protect your inheritance from your spouse in a divorce.

How are Inheritances Handled in Divorce?

In a divorce proceeding, the judge considers all assets of both parties as a joint unit and also individually. The courts classify assets as either separate or marital, which determines how it is divided in the divorce. In Indiana, there are a few things the courts consider as separate property, such as property or gifts a spouse received before the marriage or after separation, as well as any assets specified within a prenuptial agreement prior to marriage. Separate property may also include inheritances, but there are other considerations about this matter to keep in mind. Marital properties are typically the assets and property obtained during a marriage, which are subject to equitable (or fair) division in Indiana. The judge may decide that the inheritance has become commingled during the marriage, which could mean both spouses are entitled to an equitable distribution of the inheritance in a divorce.

What is Commingling?

Commingling takes place when assets that were originally considered separate property become mixed or commingled with what is considered marital property. How does commingling happen with an inheritance? If the spouse with the inheritance puts the money in a joint bank account with their spouse, it would then be considered a marital asset and subject to equitable division in a divorce. Another common way inheritance recipients commingle their inheritance is by using that money on marital assets, such as paying for the mortgage of the marital house, paying a car payment for the spouse with the inheritance, or using the money to cover a spouse’s other expenses, i.e., medical bills or other debts. In order to protect your inheritance from your spouse, it is vital that you avoid commingling at all costs. The money from the inheritance should be kept in a sole bank account and either saved or used solely on yourself to ensure it stays a separate property.

What if I Receive an Inheritance During a Divorce?

The time between the initial separation and the finalization of the divorce can be confusing and tricky. In the event that someone receives an inheritance before the divorce but after the separation, the inheritance would most likely be considered a separate property safe from equitable division. There are a few caveats to this notion. For starters, the recipient of the inheritance would need to prove that the inheritance was received post-separation. They would also need to provide the separation date to the court, which may not be the same as the date the divorce papers were filed.