Much of your wealth comes from an inheritance you got from your parents or grandparents before you even got married.
For instance, maybe you got married and divorced in your 20s. Then, in your 30s, you inherited more than a million dollars. It changed your life. In your 40s, you got married again. Now you are facing the prospect of another divorce — after all, second marriages often do not last.
Many people in this situation assume that they do not have to protect that asset — the inheritance — from the divorce. They clearly owned it, alone, before they got married. It never belonged to their spouse. Their parents clearly intended for it to go only to them. Won’t the court see it that way?
They very well may. But there is one way that you can put your own inheritance at risk: commingling.
Combining funds, providing access
Commingling essentially does two things. First of all, it happens when you combine your funds with those owned by your spouse. Say you use a joint bank account. You both work and all of the money goes into that account. You put the money from the inheritance in there, as well. Now it has been mixed with assets that do belong to your spouse, and they may have a claim to it.
After all, how can you say what specific money you used? Maybe you took the money from that account to pay your mortgage and your other bills. You thought of it as leaving your inheritance in the account and spending your income, but your spouse thought of it as saving your income — a marital asset — and paying the bills with your inheritance. Who is right? How can you prove it?
Secondly, putting the money in that account also gives your spouse access to the money. They felt they were allowed to use it however they wanted during your marriage. It wasn’t a gift to them, exactly, but it was something you gave them. You both understood that you could use the money jointly after getting married. They may argue that that access needs to continue through the divorce, and that means dividing the assets with your ex.
Keeping it safe
So, what do you do to keep it safe? Just keep it separate. If you never mix the money and never give your spouse access, then they cannot claim that money when they become your ex.
Of course, with so much money on the line, this case may become fairly complex and contentious. Make sure you are well aware of all of your legal options and your rights.