Is My Spouse Entitled to Half My Inheritance?
If you receive an inheritance and are getting a divorce on Long Island, you may be wondering whether New York law will treat your inheritance as marital property or separate property. Here’s what you should know and how to get help from an experienced Long Island divorce lawyer.
Inheritance & Equitable Distribution In New York
In New York, equitable distribution guidelines dictate that inheritance be treated as separate, not marital, property. This means that even if you received your inheritance after you were married, it is still considered your own personal property and is not shared by your spouse. However, there are several things you should do to ensure that your inheritance is, in fact, treated as separate property when dissolving your marriage. You must be able to prove to the court that it’s separate property in order to prevent some or all of your inheritance from being distributed to your spouse.
How to Keep Your Inherited Assets & Property Separate on Long Island
If you have an inheritance or will be getting one, here are some tips to ensure that your inheritance is properly documented as separate property in the event you get a divorce in the future or if you’re going through the process of divorce now.
Sign a Prenuptial or Postnuptial Agreement
Once viewed as “unromantic,” a prenuptial or postnuptial agreement is now recognized as a necessity, particularly if one or both parties are coming into the marriage with significant assets. If you are already married and receive an inheritance or financial windfall, a postnuptial agreement can protect assets that belong only to you. In the event of a divorce, a court must adhere to the terms of the agreement regarding how property is allocated between spouses.
Open Separate Bank Accounts
You and your spouse should have separate bank accounts to prevent the commingling of separate assets, particularly cash reserves and liquid assets. You should not place funds from an inheritance in any joint bank account, be it checking, savings, or another type of interest-bearing account. If you receive an inheritance after you are married, you should open a separate bank account in your name only for your inheritance.
Set Up a Trust
A trust is a specific type of entity that allows a person or organization to hold property and assets on behalf of another party. The party in charge of the trust is called the trustor and must ensure that the assets in the trust are held or distributed according to the best interests and wishes of the trustee. Placing an inheritance into a trust provides a second layer of protection against the commingling of assets and makes it easier to keep your inheritance separate in the event you get divorced.
Do Not Name Your Spouse
When setting up bank accounts, establishing trusts, purchasing real estate, etc. with your inheritance, it’s critical that you do not place your spouse’s name on the ownership documents. If you want your assets to transfer to your spouse upon your death, it’s better to create a will that names them as the beneficiary of those assets. If your spouse is named on any legal document, it will be more difficult to establish to the court that the property is part of your inheritance and therefore separate.
Keep Copies of All Documents
Keep hard copies of all documents related to your inheritance, your individual bank accounts, trusts, real estate, etc. in a safe place where your spouse cannot access them. Often, the safest and most convenient place is to open a safety deposit box and keep copies of your documents there. This keeps your important documents from being accessed maliciously or without your knowledge should you and your spouse decide to separate. If not, you can name your spouse as the recipient of items in your safety deposit box upon your death if you wish.
Hire an Experienced Long Island Divorce Attorney to Advocate for You
The best way to ensure the protection of an inheritance you receive is to work with an experienced Long Island divorce lawyer. At Hornberger Verbitsky, P.C., we can guide you through the process of putting protections in place for your inheritance. Contact us today by dialing 631-923-1910 or fill out the short form on this page.
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