Protecting an Inheritance from Divorce in New York
Brooklyn attorneys help beneficiaries keep their legacies
Although an inheritance received by a spouse is considered separate property, there are ways it can change into marital property and thus become subject to equitable distribution. At Goldberg Sager & Associates, our family law attorneys have over 25 years of experience helping spouses protect their inherited wealth. We provide effective legal support to clients in Brooklyn and the five boroughs.
Is inheritance considered marital or separate property in New York?
New York courts follow the rule of equitable distribution in dividing marital property, which means a fair but not necessarily 50/50 split. Marital property is that which couples acquire during marriage. Separate property is that which they had prior to marriage. Third-party gifts and inheritances to a single spouse during marriage may also be considered separate property. If your spouse is claiming a share of any part of your inheritance, our Brooklyn divorce lawyer can assist you in safeguarding your interest.
Can an inheritance be protected during divorce?
An inheritance can become marital property if it is commingled — that is, merged with jointly owned assets or used for common purposes. In divorce proceedings, assets are presumed to be marital until separate ownership is proven. We will advise you about documents to provide to the court to prove separate ownership and will advocate on your behalf.
How to keep an inheritance separate from marital assets
You should place your inherited assets in a separate account that is in your name only. Don’t add the funds to joint bank accounts or jointly-owned investment accounts. Also, be aware that if you use your inheritance to help finance purchase or improvement of the family home, the home may to that extent be considered marital property. The same is true for use of inherited funds for other common purchases or purposes. Our firm can provide guidance on the best ways to avoid division of the inheritance.
Strategies for preserving an inheritance in divorce proceedings
We can help you develop an overall plan to protect your inherited assets. One strategy for preserving an inheritance is to place it into a living trust. Such a trust allows you to use the assets during your lifetime and pass them to your beneficiaries when you die. The assets owned by the trust are not divisible in a divorce. If you inherited real estate, conveying an interest in the property to your spouse will cause it to be transmuted into marital property. If you wish to avoid this, you should keep the deed in your name alone. Also, be aware that any contributions your spouse makes to the upkeep or financing of the property, including payment of taxes, can lead to a finding that the asset was commingled.
Impact of prenuptial and postnuptial agreements for protecting an inheritance
A valid prenuptial or postnuptial agreement can provide that specified funds or property are solely owned by you and are not subject to equitable distribution. Prenuptial agreements are established before marriage and postnuptial agreements are signed after marriage. Such an agreement shows the court your intent to keep the specified property separate.
