Handling inheritance is often a contentious issue for divorcing couples in Illinois. Although the events that allow for an inheritance to occur can be tragic, the truth is that inheritances often provide much-needed financial security. A couple may have counted on receiving an inheritance during periods of their relationship when they got along and were planning for the future.
But once a couple begins talking about divorce, they may be unsure how an inheritance is handled. Does it belong to one spouse or both spouses? What if the funds from the inheritance were placed in a joint bank account and spent on household expenses? In this article, we will address some common questions about how inheritances are handled in an Illinois divorce.
Marital Vs. Non-Marital Property
During the asset division process, all assets must be analyzed to determine whether they are marital or non-marital. This process can be quite complicated, but generally, assets that either spouse acquired during the marriage are considered part of the marital estate and will be subject to division.
However, inheritances are usually one important exception to this rule. Illinois law considers property, cash, or other assets that a spouse acquired through legacy, gift, or descent to be exempt from marital property.
When Can Inheritance Be Considered Marital?
Although inheritance is generally considered non-marital property, spouses can use inheritances in ways that cause them to have both marital and non-marital characteristics. If a spouse received cash from an inheritance and put that money into a joint account that both spouses owned, some or all of the inheritance could become a marital asset. Likewise, even if a spouse kept his or her inheritance separate from joint bank accounts but spent the money on a shared asset like a mortgage or home improvement costs, the non-inheriting spouse would likely still be entitled to their portion of the increased value of the shared asset.
How Can I Keep My Inheritance Non-Marital Property?
If the inheriting spouse wishes the inheritance to maintain the status of non-marital property, he or she must make sure to keep the inheritance separate from marital funds. The best way to protect an inheritance is to sign a prenuptial or postnuptial agreement clearly addressing the issue and stating that an inheritance will remain the sole property of the inheriting spouse in the event of a divorce.
Absent a prenuptial or postnuptial agreement, inheriting spouses should keep their cash inheritance in a separate account that is owned and managed exclusively by themselves. If a property is inherited, spouses should exercise great caution when using the property in ways that may cause it to be viewed as a marital asset, such as renting out the property and spending the funds on marital expenses.
Speak with a DuPage County Asset Division Attorney
Understanding how inheritances and other assets are handled in divorce is crucial for ensuring an equitable marital property settlement. If you are considering divorce, consider speaking with a Naperville, IL divorce attorney with [[title]] who can help you understand your rights and obligations under Illinois divorce law. Call us today to schedule your initial consultation at [[phone]].