The process of dividing marital property is the focal point for many divorcing spouses in Maryland. This is understandable, as the outcome of this process will shape the financial futures of both spouses for many years to come. In most cases, spouses are entitled to an equitable division of assets. There are some instances, however, in which a portion of wealth was never intended to be shared between partners, and where one spouse feels strongly that these assets are left out of the divorce process.
Such is the case with an inheritance that was left to only one spouse. When a loved one leaves behind money or property, that gift is often intended for the heir alone to receive. While most who give this gift understand that the benefits will be enjoyed by the heir's entire family, there are few who would relish the thought of an heir losing half of that gift by way of divorce. However, without the proper protective measures in place, that is exactly what could end up as a reality.
In order to shield an inheritance from this fate, a prenuptial agreement offers the best possible protection. Verbiage can be included that specifically addresses any current or future inheritance or sizeable gift, and how those assets are to be divided in the event of a divorce. For individuals who are already married, the same level of protection is available by means of a postnuptial agreement.
Another, although markedly less certain, means of protecting an inheritance from the property division portion of a divorce is to ensure that those assets are kept completely apart from marital funds. These monies should be deposited into a separate account, and should remain there. It is essential to avoid depositing any other funds into the account. Those assets should never be withdrawn and used in ways that create confusion as to whether they should be considered marital or separate funds.
For those in Maryland who are concerned about whether an inheritance might be at risk for property division, it may be helpful to meet with a family law attorney to review the situation. There are steps that can be taken to shield an inheritance from division during divorce, but spouses must be proactive in the matter. Following the tips given above is a good place to begin, followed with a more personal approach tailored to one's specific financial scenario.
Source: The Wall Street Journal, "How to Keep an Inheritance From Going to a Spouse During Divorce", Neil Parmar, Nov. 9, 2014