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Michigan Family Law Blog

Wednesday, January 23, 2019

I Inherited Money While I Was Married - Will I Have to Split it in a Divorce?

Property division can be a fiercely litigated issue in a Michigan divorce case. A spouse may disagree about several issues related to property division, including what constitutes marital property. An inheritance may be the cause of litigation when non-inheriting spouse asserts that the inheritance should be included as a marital asset. Our Michigan property division lawyer discusses some of the instances in which a non-inheriting spouse may win that argument.

Property Division Laws in Michigan

Michigan is an equitable division state for divorce actions. When parties cannot agree on property division, a judge determines a fair and equitable division of the marital assets. Fair and equitable does not always mean equal.

The property subject to division is marital property.  Marital property is usually defined as income and assets earned during the marriage. The asset does not need to be titled jointly to be considered marital property.

Inheritances received during a marriage are usually an exception to the marital property rule. An inheritance is typically viewed as separate property and not subject to property division. However, there are exceptions to this general rule.

When Can An Inheritance Be Subject to Property Division?

There are some cases in which a judge may decide that an inheritance should be included as a marital asset. One of the most common situations is when a spouse co-mingles the inheritance with marital property. For instance, the spouse deposits the inheritance into a joint checking account and uses the money for the benefit of the family or the parties. A spouse should open a new bank account in his or her name only and keep all inherited funds in that account to increase the chance the inheritance will remain separate property.

The length of the marriage may impact the decision to designate inheritance as marital property. If the parties have been married for a long time and both parties were relying on the inheritance for retirement savings, the judge may decide that the inheritance is marital property.

When a couple has a child, the court may view an inheritance as marital property if dividing the inheritance is in the best interest of the child. Sustaining a standard of living that was expected by both parties may be another reason why a judgment may include an inheritance in a property division. The judge may determine that marital property is insufficient for suitable maintenance and support, thereby using the inheritance to remedy the problem.

Inheritances Received After a Divorce Case Is Filed

An inheritance received after the divorce case is filed but before the divorce is finalized is rarely considered marital property. However, the inheritance could impact spousal support payments depending on the size of the inheritance.

Call a Michigan Property Division Lawyer for More Information

A Michigan property division lawyer can answer questions about inheritance and property division so that you are prepared for whatever may occur. Your attorney may offer suggestions  Contact Michigan property division attorney Cameron C. Goulding to discuss your options for maintaining the inheritance as separate property to mitigate the chance that a court will give a portion of the inheritance to your spouse.

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