Is an inheritance protected from being divided in a divorce?

| Apr 26, 2021 | Divorce

Colorado is an equitable distribution state. This means that the division of property during divorce happens in a way the court deems fair. The factors a court may consider when determining a fair division of property include the value of property owned, the financial standing of each partner and which spouse assumes custody of children. Most property acquired during the marriage becomes subject to the laws of equitable distribution. But some property is considered “separate” and remains the property of a single owner.

Inheritance and property division

An inheritance is separate property that is not subject to equitable property division when couples divorce. But it is possible for someone to take actions that may cause the possessions he or she inherited to become subject to division.

One way the assets that are part of an inheritance can become subject to property division is through commingling. This happens when the person receiving an inheritance chooses to include its contents among the marital assets. One example of this is depositing money gained through inheritance in a joint bank account and using the money to pay expenses as a couple. Commingling also happens when using inheritance to buy a home or make other large purchases.

Inheritance protection

One way to protect inheritances and other separate property from being divided during a divorce is through a prenuptial agreement. These agreements can become a point of contention for some couples but may be worth the trouble for the spouse owning the separate property.

A postnuptial agreement is a second way to protect an inheritance from the property division process. But it is worth noting that the simplest way to protect inheritance assets is to avoid commingling them with marital assets.

It is possible to protect a commingled inheritance from property division without a signed agreement if the owner can demonstrate no intent to share assets. But this argument may become difficult to prove if the actions of the spouse inheriting the property suggest otherwise.

The property division aspect of the divorce process can involve complicated legal issues. Individuals with questions regarding the property division process may find the answers they need by speaking with a divorce attorney.

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