An inheritance can provide additional financial resources and signify love and affection from a relative or loved one. If you are going through a divorce, you rightfully want to protect your inheritance from being taken by someone it was not intended for. It’s crucial you understand how to protect your inheritance during divorce. An experienced property division divorce lawyer from Stahly Mehrtens Miner LLC can explain Colorado’s property division rules and how we can help.
Marital Vs. Separate Property
Colorado is an equitable distribution state for divorce. When a couple divorces, they or the court identifies what property is separate and what property is marital. Marital property is generally any property the couple received during the marriage. Property can include something tangible, such as a house, intangible like intellectual property, or wages, among other possibilities.
Separate property is property that you or your spouse owned before the marriage. So, if you received the inheritance before you got married, it would be considered separate property. Additionally, separate property under Colorado Revised Statute 14-10-113 includes the following:
- Property acquired by gift, bequest, devise, or descent
- Property acquired in exchange for property acquired before the marriage or in exchange for property acquired by gift, bequest, devise, or descent
- Property acquired by a spouse after a decree for legal separation
- Property excluded by valid agreement of the spouse
Marital property is subject to division during a divorce, while separate property is not. If you received your inheritance in any of the ways outlined above, your inheritance should be separate property. However, if you and your spouse were both named as beneficiaries, the inheritance would be considered marital property and subject to division.
Increased Value of Inheritance During Marriage
It’s possible that the value of your separate property could have increased during your marriage. For example, your inheritance may be stocks, bonds, investments, or real estate that increased in value. While the inheritance itself is not marital property or subject to division during a divorce, the increased value of the property could be.
Comingling Inherited Assets
While an inheritance is generally separate property, it’s possible in some situations for it to become so mixed with marital property that it is no longer distinguishable from marital property. For example, you could have deposited your inheritance in a joint bank account you share with your spouse. By paying joint expenses such as mortgage payments out of this account, they could become marital property.
Protecting Your Inheritance During Divorce
Protecting your inheritance during your divorce relies on you protecting it during your marriage. You should keep your inheritance separate and not use the proceeds for marital expenses. This step can help you retain the identity of the inheritance as separate property. Keep a copy of the trust, will, or other document that provided your inheritance.
When you have valuable assets at stake, it is best to work with an experienced divorce lawyer who can take steps to protect them. Contact Stahly Mehrtens Miner LLC at (303) 797-2900 to arrange a confidential consultation.