If you’re in the initial stages or well into the divorce process, you’re probably concerned about many things. There are rising court costs, finding the right lawyer, and if you have children, you might be in the middle of an exhausting custody battle. The last thing you want to do is to add another stressor to your already overflowing plate.
But as stressful as it is, coming to a settlement with your spouse about dividing assets is something you cannot put off, for the security of your assets and theirs, especially if you’ve received an inheritance from a relative.
Inheritance as separate property
Inheritances are treated as separate property in the state of Texas, whether they were received prior to or during marriage. So that means you are entitled to protect your inheritance from being subject to equitable division in a property agreement – generally speaking. There are, however, some special considerations that may become problematic.
Inheritance as community property
In the previous post, I mentioned the term “commingling,” which essentially means mixing your personal assets with your spouses while you’re married. If you intend to keep your inheritance protected from becoming community property, then you must avoid commingling your inheritance money when it legally comes into your name. If you do commingle for investment purposes, then your spouse will have a right to a portion of your inheritance. Here are a few examples of commingling:
You inherit money while you are married and deposit it into a joint account shared with your spouse.
You pool together your inheritance money and your spouse’s money to make a large purchase, like a family home.
You use your inheritance to pay off a community debt shared by you and your spouse
Keeping your inheritance separate
Before you start getting anxious about your inheritance, there are ways you can protect it and keep it as your own separate property. You can ensure it remains yours by:
Having a prenuptial agreement that clearly states what property belongs to you and what belongs to your spouse
Not using separate money gifted to you to pay off marital debt
Keeping a separate bank account
Keeping all separate property or deeds in your name alone, including maintenance work done on any of these properties
The best thing you can do to keep your inheritance your own is to make sure all property is truly separate from the very beginning of your marriage. This will save you from the pressure, and countless headaches, of trying to figure out who gets what if your marriage ends in divorce.