When you inherit something, you might assume it belongs solely to you. Generally, New York law treats inheritances, like gifts, as separate property. However, divorce can complicate this assumption. If you haven’t kept your inheritance completely separate from marital funds, it could become subject to property division.
How commingling could blur the lines
In a New York divorce, you can typically retain your separate property, which includes assets acquired before marriage, settlements, assets explicitly stated as separate in a written agreement, gifts and inheritances. Conversely, marital property encompasses assets acquired by either or both spouses during the marriage.
However, individuals occasionally convert inherited assets from separate property into marital property by commingling. This refers to combining inherited assets with marital resources. For example:
- You deposit inherited funds into a joint bank account.
- You use inherited money to pay off the mortgage or renovate your family home.
- You generate income from inherited property and use that income to fund family vacations, pay bills or cover other expenses during the marriage.
In these situations, distinguishing between separate and marital property becomes difficult. If tracing assets to their separate property source proves too challenging, the court may treat them as marital property, subjecting them to equitable distribution.
To avoid potentially unfavorable outcomes, you and your spouse can negotiate and resolve how to divide property through mediation. However, if you and your spouse cannot reach an agreement, the court will intervene and decide.
The role of a divorce attorney in protecting what’s yours
Many aspects of divorce are difficult to handle alone. If you are having trouble with property division and other divorce matters, a family law attorney experienced in matrimonial law can help you by tracing and valuing assets, voicing your concerns and negotiating a fair outcome.
With the proper support and a clear understanding of your goals, you can power through this process and move forward with your life.