The process of receiving an inheritance from a family member can be complex – emotionally, legally and financially. You may inherit sentimental keepsakes, in addition to money bestowed upon you from your loved one.
An inheritance can add up to a significant amount. So, it is natural to worry about it if you are facing a divorce.
What happens to the inheritance?
Generally, North Carolina law classifies an inheritance or other type of gift that is in your name as separate property. However, that could change depending on the facts of your case. It is important to look at whether:
- You kept the inheritance separate
- You mingled inheritance assets with marital property
These are the two critical factors that will determine what happens to the inheritance, whether you obtained it before or during the marriage. If you kept it separate, then it remains separate property.
If you combined the assets with a joint account with your spouse, then it is likely marital property. In these cases, your spouse may have a claim to the inheritance, and you may have to divide it.
Remember: An inheritance could include a wide range of property
While money is often the most common kind of asset in an inheritance, it is not the only one. You may have received other valuables from your family members, including:
- A family heirloom
- A home or other real estate property
- Artwork, an antique car or other assets
Any of these assets could be in your inheritance. Many people concentrate on money or their house when they approach property division, but it is important to remember these assets as well when compiling your inventory.
There is no doubt that dividing your finances and property in divorce will lead to changes in your financial life. It can become even more challenging when certain items carry immense sentimental value – such as those inherited from a loved one. However, there are ways to protect your property throughout the process of divorce.