During the divorce process, spouses need to decide how to divide all of their property. Colorado has laws in place to try to keep this process fair. However, the asset division process can still end up being one of the most complicated and contentious parts of divorce.
Generally, each piece of property counts as either marital property or separate property. Understanding the difference between the two can help you prepare for the asset division process, and help you better advocate for fair outcomes.
Is an inheritance marital or separate property?
Marital property generally includes all property either spouse acquires during the marriage. Separate property generally includes the property a spouse acquired before marriage. However, there are some exceptions.
An inheritance is one of those exceptions. An inheritance counts as separate property, even if you inherited it during your marriage. Unfortunately, it doesn’t always stay separate property.
Depending on what you did with your inheritance, it could be commingled. This means that your separate property could be mixed with marital property. Your inheritance may be commingled if you put your inheritance in a joint account or put it toward the marital home or other investments.
What you did with your inheritance matters because marital property gets fairly divided between you and your spouse during divorce, but your separate property stays with you. If separate and marital property become commingled, it can be difficult to separate the two, which can result in an unfair division.
If you are concerned about how your inheritance will be handled in divorce, it may be worthwhile to speak with a professional. Every situation is unique, and the particulars of your situation will affect your options.