Many married couples will commingle – or mix together – all of their finances. They will open a joint bank account where they get direct deposit for their paychecks. They will pay the bills out of this account and use it to keep things like bonuses, gifts, money that they get for the holidays and much else. They may even include an inheritance that they get from their parents.
Unfortunately, it can be problematic to commingle your inheritance. If you and your spouse later get divorced, this may mean that your inheritance is now a marital asset. Your spouse also has a claim to it because you shared it with them during the marriage. It may be true that your parents left the money to you initially, but commingling it changes the status and may mean that you have to divide it during the divorce.
How can you protect it?
One of the easiest ways to protect your inheritance is simply by keeping it separate once you have received it. Create your own investment portfolio or bank account to store the money. Only allow yourself to have access. Don’t use the money to purchase joint assets – like a house – that you and your spouse may share. This way, if you do get divorced, you can keep the whole inheritance.
Another potential option to protect an inheritance could be to use a prenuptial agreement or a postnuptial agreement. If you do this, it becomes less important where you store the money because your spouse has already given up their claim to it.
As you can see, the financial side of a divorce can get quite complicated. Make sure you understand all of your legal options.