When you divorce in Maryland, most marital assets are subject to property division. In other words, you may have to divide your marital home, cars, joint savings accounts and other assets you and your spouse acquired as a couple.
If you have a sizable inheritance, however, you may be wondering if it will fall into the marital pool. Here is what you need to know.
Is inheritance considered marital property?
Generally, no. The law considers inheritance separate property belonging only to the spouse that received it. For example, if you receive $200,000 from your grandmother’s will, that money belongs to you and you only.
This fact also applies to other inherited assets, such as:
- Properties
- Vehicles
- Stocks or bonds
- Businesses
- Valuable collectibles
However, separate property can become marital property in a process called commingling.
What is commingling?
Commingling is when you mix separate property with marital property. This can happen in several ways, such as:
- Depositing inheritance money into a joint account for marital expenses
- Using separate funds to renovate a marital home
- Using separate property to pay off marital debts
- Buying a car with a mix of separate and marital funds
- Living in an inherited house together
You can only commingle separate property with marital property, not the other way around. If you commingle your inheritance, it can be very challenging to prove that it should remain as separate property in a divorce.
All marital property is open to equitable distribution under Maryland law. This means that the court will divide your marital assets fairly—but not necessarily equally—between you and your spouse.
How can you protect your inheritance?
The best way to keep your inheritance out of the marital pool is to avoid commingling. You may want to keep the funds or assets in your name only. Moreover, you should avoid using your inheritance to pay for marital expenses.
A prenuptial or postnuptial agreement can also help protect your inheritance. For example, you can include a clause in your prenup stating that all inheritances will remain separate property.
Consider seeking legal help
Divorce can easily become complicated, especially when there are inheritances involved. It can be challenging to prove ownership of your inheritance or put up safeguards around it. That said, consider speaking to a divorce attorney who can offer legal options and help you understand your rights.