The issue of inheritance during a divorce is somewhat complicated.
That’s because how you deposit and use the funds determines whether or not it could be considered an asset that needs to be divided during divorce proceedings in Illinois.
Being proactive about inheritance is great, but if you’re now facing a divorce and wondering what might happen to your inheritance, here’s a look at how the courts view inheritance money.
What is inheritance?
Inheritance is any money or assets set aside for you in someone’s final will or living will and trust.
Inheritance is easy to protect with a prenup or postnup agreement if you’re concerned that your spouse might go after it in the case of a divorce.
Is inheritance ruled marital property during an Illinois divorce?
During divorces in Illinois, the courts review both marital property and non-marital property.
Marital property is all assets and all property that is in possession of either spouse or the two parties combined. Marital property can include:
- Real estate
- Bank accounts
However, there is an exception to this rule for property that is “acquired by gift, legacy or descent.” The terms “legacy and descent” refer specifically to inheritance.
Therefore, under this exception, inheritance is ruled non-marital property.
For the courts to rule inheritance funds as non-marital property, you’ll need to prove that the money is inheritance. This includes presenting the will and testament that sets forth the money as yours.
Once you’ve proven that the money is an inheritance, the courts will go through and label your assets as marital and non-marital. All non-marital property is retained by the spouse whose name is on it or is in possession of it.
Ways inheritance can become marital property
Regarding how inheritance can become marital property in Illinois divorces, it all comes down to whether or not the money has co-mingled with your marital property. There are a variety of ways this can happen.
- The money is placed in a joint account with both parties’ names on it.
- You use the inheritance to purchase real estate in both of your names or refinance real estate using the money for a property in both of your names.
- Retitling real estate that you purchased using your inheritance to then be in both you and your spouse’s name.
- Asking your spouse to pay for improvements to a property you purchased using the inheritance. You could also use joint funds for upkeep on such property, muddying the waters as far as whether or not the inheritance is considered marital or nonmarital during divorce proceedings.
It’s important to note that inheritance that you receive from a living relative is considered a gift, which falls under the non-marital asset category. But you’ll want to be very careful how you use that gift if you’re considering divorce or are undergoing a divorce at the time you receive the funds.
How can inheritance affect Illinois divorce cases?
While the division of property should only consider marital property and not non-marital, inheritance and other personal assets could affect the speed with which your divorce is completed.
An inheritance could also affect the alimony or spousal support the court orders you to payout. That’s because the courts will evaluate alimony based on both the income and property that each party has, including non-marital property.
Contact Diamond Divorce Law to protect your assets during a divorce
The best way to protect your inheritance is to work with a skilled Illinois divorce attorney. Your attorney will help you prove non-marital assets and can help reduce alimony or spousal support related to such non-marital assets. Contact Diamond Divorce Law today to discuss your case.