What happens if you receive an inheritance during your marriage and then you get a divorce? Is your spouse entitled to a portion of your inheritance?
Oftentimes, at the time a party received an inheritance, a divorce was not being contemplated, so no consideration is given to the use of the inheritance. Under the laws of the state of Tennessee, property inherited is considered separate property which means it is not subject to distribution upon divorce. However, there are certain circumstances that can change the nature of the asset and convert it to marital property.
For instance, if you inherit money and you use that money to purchase a jointly titled car, then it can be argued that the money was a gift to the marriage and the car is marital property subject to equitable distribution upon divorce. Another example would be if you inherit money and place in a joint account and commingle it with earned income. In that scenario, it can be argued that the money has been so commingled that it cannot be segregated, and it loses its separate identity.
- If you inherit assets prior to marriage, you can protect those assets with a pre-nuptial agreement that specifies that the inherited assets remain your separate property and the things you buy with the inheritance remain your separate property even if you divorce.
- If you inherit assets or money while married and you want to keep it separate from the marital estate, it must be kept in your name if it has a title and not mixed with marital assets if you want it to maintain its separate identity.
If you inherit money, it is important that you do not place the money in a joint account or mix it with marital funds. The best policy is to place the funds into an account in your name alone and not add any additional funds that could be considered marital.
If you are contemplating a divorce and have inherited assets, it would be to your advantage to consult with an experienced domestic attorney about protecting your inherited property. Please call us at Held Law Firm 865-637-6550, we would be happy to help.