Familial wealth can be a great boon to those who inherit it. Even though you likely have a career, knowing you stand to inherit property from your parents’ estate can help defray financial concerns, such as the expense of retirement or medical treatments for serious conditions.
Most people who inherit intergenerational wealth share that windfall with their family, including their spouses and children. While that level of generosity is admirable, you want to take great care to protect yourself and your inheritance, even from the people you love and trust the most, such as your spouse.
After all, a large windfall could create financial motivation for your spouse to break up your family and divorce you. Proper legal precautions not only help safeguard your marriage from the strain of a sudden influx of finances, but also protect you from the loss of your inheritance in the event of a divorce.
Sharing and giving free access to your inheritance are different
It is truly a beautiful thing to be able to harness the resources you received from your parents to provide a better life for your spouse and your children. You can use an inheritance to pay off a mortgage, to pay for college, to cover medical expenses or to fund exciting travel adventures.
Regardless of how you want to utilize your inheritance, you should not allow your spouse free access and control of the funds. Depositing a large inheritance into a shared bank account effectively makes that inheritance marital property. If either of you choose to file for divorce, it will leave your inheritance vulnerable to division.
Allowing your spouse access to, or control of, your inheritance or placing it into a shared account is an act legally referred to as commingling. Once you commingle your inheritance, your spouse will have a legal claim to a portion of that inheritance in a divorce, even if the money was specifically left to you and not your spouse. Creating a separate account and sharing, but not giving access to, the funds is your best option.
Make sure you maintain your inheritance as separate property
No matter what someone else may say to you about how you handle your finances, choosing to protect your own future and the intention of your deceased loved one is not greedy or selfish. If your family members wanted your spouse to specifically inherit a portion of the family’s assets, they would have made arrangements for that in their last will.
The fact that those funds were bequeathed only in your name is likely an indicator that your loved one wanted you to have sole control over those assets. What you do with them, including sharing them with your family, is up to you. Choosing to avoid commingling and maintain your inheritance as a separate asset protects the legacy your loved one left behind.
Large amounts of money can make people behave in uncharacteristic ways, including choosing to end a marriage in the hope of acquiring some of that money. Taking time to protect yourself and your inheritance may help your marriage and will certainly protect you in the event of a divorce.