Inheritances can be a point of contention in a high-asset divorce. This is especially true for very wealthy families where inheritances are typically large, ranging from entire properties to millions of dollars in funds.
With that in mind, you might be wondering if you can protect your inheritance from property division in the event of a divorce. The short answer is yes, but it takes several legal steps.
Create a prenuptial or postnuptial agreement
A prenuptial agreement can help make your divorce less antagonistic, especially when sizable inheritances are involved. For one, a prenup can clearly define inheritances as separate property.
Under Florida law, separate property will remain only yours after a divorce; it will not be subject to property division. Generally, the law considers inheritance as separate property, but a prenup can help provide extra protection.
On the other hand, a postnuptial agreement can help protect the inheritances you receive after marriage.
Avoid commingling
Commingling occurs when you mix separate property with marital property. For example, if you deposit inherited money into a joint account, the court may consider that marital property and therefore subject to division.
Using marital funds to improve an inherited asset can also be commingling. An example would be using your marital savings to renovate an inherited house.
Other examples of commingling include:
- Using inherited funds to renovate or add value to a marital home
- Investing inherited funds into a business you own with your spouse
- Using your inheritance to buy shared assets like cars or furniture
- Regularly paying for household expenses with inherited money
- Mixing inherited stocks or funds with jointly owned investments
When commingling is at play, it can be challenging to convince a judge that your inheritance should remain separate property.
To avoid commingling, it is crucial to keep inherited assets separate and maintain clear records of all transactions. You would also not want to add your spouse’s name to your separate bank accounts, deeds, titles and other ownership documents.
Explore your legal options
An airtight prenup or postnup can be a valuable tool in protecting your inheritances. Consider speaking to a divorce attorney who can help you create an agreement that is fair to both you and your spouse, while also protecting the assets you don’t want to divide.