If marriage means sharing everything, then divorce can often mean separating everything.
When a happy couples weds, it can often mean the combining of finances including any generous gifts bestowed by parents or grandparents including inherited assets. But what happens to those items upon divorce?
Separate v. Marital Property Decision in Divorce
Whether or not property is “separate” or “marital” is dependent upon where the couple divorces. Marital property, also known as “community” property, is typically defined as everything that either spouse earned or acquired during the course of the marriage unless another decision regarding the property has been made. Separate property belongs to only one spouse.
Prenuptial and postnuptial agreements can help shield assets if a couple ends up in divorce court. This can outline any property that is considered separate property before and during the marriage, such as inheritance or any major gift given to one of the spouses. Along with this prenup, a spouse should also maintain any documentation that goes along with the inheritances or major gift, that denotes it has been given to them specifically. Additionally, these assets should not be kept in a joint account. Rather, it should be put in a separate bank account or investment account.
Working with a Divorce Attorney
Working out a prenuptial agreement or division of assets can be a difficult thing to do on your own. Working with an attorney that handles prenuptial agreements, postnuptial agreements, and property division can help to ease any tensions.
Source: The Wall Street Journal, How to Keep Your Inheritance in a Divorce, November 9, 2014