Inherited Property in Divorce Proceedings

 Posted on December 00,0000 in Division of Property

Divorce is a complicated topic. There is virtually no limit to the types of issues that can arise, and each case is as unique as the individuals and families involved. Dividing property in divorce is often among the most difficult considerations with which a couple must contend, and while the laws regarding the process are seemingly straightforward, their practical application is often quite complicated. This can be especially true regarding inherited property, or assets received by either spouse following the death of friend or family member.

What Does the Law Say?

According to the Illinois Marriage and Dissolution of Marriage Act, the marital estate—property that is subject to division in divorce—consists of all assets and debts acquired by either spouse subsequent to the marriage, with limited exceptions. Among the most prominent exceptions, however, is “property acquired by gift, legacy, or descent or property acquired in exchange for such property.” In other words, anything given to you as a gift or as inheritance is non-marital property, as are proceeds from the sale of gifted or inherited property. For example, if your uncle passed away and left you his home, you could still sell the home and keep the money as a non-marital asset.

Commingled and Transmuted Inherited Property

While any inherited property is presumed to be non-marital, and, therefore, not subject to division in divorce, it is possible for it to become marital whether you intend it or not. This can happen if you combine your inherited property with other marital assets in such a way that it “loses its identity” as non-marital property. For example—and this would not be unreasonable for a couple in the midst of a marriage—you may fully intend to use your inheritance to better the life of your family. As such, you deposit the money into an account that you share with your spouse, using the funds to pay bills, make mortgage payments, and to go on family vacations. Your inherited property would likely be seen as losing its identity. If the marriage eventually soured, it would be very difficult to claim that you should be reimbursed for your inherited property.

Options for Keeping Inherited Property Separate

Depending upon when you receive your inheritance, there are several ways to protect it as non-marital property. Most easily, you may consider creating a separate account to hold the funds. You will, however, want to be sure that your spouse is aware of the inherited property and the account so that you cannot be accused of hiding assets. Alternatively, a postnuptial agreement—or a prenuptial agreement if you are not yet married and anticipate an inheritance—can formalize your arrangement for keeping your inherited property separate.

Working with inherited property in a divorce can be challenging, but you do not need to do it alone. Contact an experienced DuPage County divorce lawyer to get the help and guidance you need along the way. Call 630-409-8184 to schedule your confidential consultation today.

Source:

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?DocName=075000050HPt%2E+V&ActID=2086&ChapterID=0&SeqStart=6100000&SeqEnd=8350000