For a married person that loves their spouse, sharing the windfall of an inheritance seems like a really good idea. After all, if you’re in this together for the long haul, it only makes sense to share the wealth. But for a divorcing couple, nothing could be more frustrating than knowing you came into a significant chunk of change along the way, and now that you’re going to need it to start life over on your own, you have to share with it the person you’re parting ways with. But do you really? Do you have to give your soon-to-be-ex a portion of your inheritance? Here in Michigan, that depends…
What did you do with your inheritance when you got it?
Did you put it in a separate bank account and not touch it, not adding anything to it and not withdrawing anything? Or did you dump it into a joint bank account and then start making other deposits along the way? Because while it may not seem like it should make a difference, how you seperated that money is going to help determine whether or not it’s considered marital property or separate property in the eyes of the court. There have been people in and around Lansing who’ve had to learn this the hard way. This issue of separate property arises often in the family courts all over Ingham County, Eaton County, Clinton County and in fact all over mid-Michigan. Our family law attorneys deal with this very issue fairly often in our practice.
If you set it aside and didn’t touch it at all…
If you put your inheritance into a separate bank account and didn’t touch it, not making any withdrawals and – equally important – not adding any money to the total, it’s likely still just yours. However, as with most things in Michigan family law, this is a gray area and certainly there is little that is black and white in our property division law. This is due to the courts looking back at the way you chose to treat your inheritance as the initial step in determining whether it is marital or separate property. Commingling the inheritance with money that belongs to both of you, is like you’re saying “this belongs to both of us, which is why I’m mixing it in with our other money.” Again, understand that this is not a hard and fast rule. There are certainly other ways that inherited, separate assets can be changed into marital property. As with most legal issues, it’s always best to have an attorney advise you about this complicated area of the law.
If you mixed separate property in with your other assets, it might now be marital property.
A person in Okemos or Mason who doesn’t make the effort to keep an inheritance separate from their other jointly owned finances, risks losing part of their inheritance if they later divorce. It doesn’t matter to the court that your Great Aunt Lila in Dewitt died and left it to you and not to your wife (who didn’t like her anyway!). Or your eccentric Uncle Dennis from Williamston, who invested in real estate, divided up his assets between his blood relatives, but didn’t name any of their spouses in his will. If you mixed it in with your other marital assets, the court will well see it as belonging to both of you
What about if your inheritance wasn’t in the form of money?
If you inherited a house, and your spouse helped you to renovate it (either with their money or with their time and resources) then the increased value of that home could become marital property. Or, the entire home could be categorized as a joint asset. Also, if you inherit a house, and you sell it and use the money to purchase a home that both you and your spouse live in together (a marital home), you’ve likely converted that inheritance into marital property. Now, if you get divorced, that home purchased with your inheritance money might be considered a marital asset to be divided between you and your spouse. Again, this is not black and white. It’s gray and it’s complex.
How do you protect an inheritance and other assets during a Michigan divorce?
If you live in Okemos, East Lansing, Grand Ledge, or St. Johns, and you’ve got questions about how to protect your assets during a divorce, call The Kronzek Firm at 517 886 1000. Our highly skilled and knowledgeable family law attorneys have spent decades helping people from all over mid-Michigan with their divorces. Spouses often hire us long in advance of filing for divorce to help them better strategize for the separation of their assets. We’ve got the experience of having helped hundreds, maybe thousands of clients navigate this difficult time, and prepare for better days ahead. Don’t try to figure out Michigan family law on your own. Get help from experts since getting it done correctly the first time is far better than those clients that hire us to clean up their DIY mistakes they have already made. Our family law attorneys have been helping clients since the last century.