Washington follows a community property system for divorce. Under this rule, all assets and debts obtained by either spouse during the marriage are community property.
There are exceptions when it comes to separate property, such as assets acquired before the marriage or gifts received by only one spouse during the marriage. In most cases, this category includes inheritances.
Will you have to divide your inheritance during a divorce?
Not necessarily. Most courts do not consider inheritances marital property. They often remain as separate property belonging to the person who received them, which cannot be divided in a divorce.
This includes inheritances received before and during the marriage. Gifts given to only one spouse are generally considered separate property as well.
What is commingling?
Commingling is when you mix or merge separate property with marital property. For example, suppose you receive a stock portfolio from your grandmother’s will. Initially, this would be your separate property.
However, if you transfer the stocks into a joint investment account with your spouse, it may then become marital property. Consequently, it will be subject to property division in a divorce.
How can you protect your inheritance?
There are several ways to safeguard your inheritance from division:
- Prenuptial agreements: You can include a clause excluding past and future inheritances from community property.
- Postnuptial agreements: If you did not have such a clause in your prenup, you can create a postnup to specifically declare your inheritance as separate property.
- Separate accounts: As mentioned, your inheritance will remain as separate property as long as you avoid commingling. For example, you can deposit your monetary inheritance into a separate account and avoid using it to pay for joint expenses, such as the mortgage or household bills.
Divorce can lead to many uncertainties about your financial future, and if you have a sizable inheritance, it makes perfect sense to want to protect it. In this kind of situation, creating ironclad agreements is the best way to keep your inheritance only yours.
Consider working with an experienced divorce attorney who can help you put up safeguards around your inherited assets. This may include prenups, postnups and careful strategies to keep your inheritance from falling into the marital pool.