Hello! In this episode of Ask the CFP®, we’ll delve into a particularly thorny issue: what happens to inheritance and pre-marital dollars in a divorce? The circumstances and decisions leading to divorce are often complex and difficult but in addition to the emotional turmoil, there are practical questions that need answers.
First, let’s discuss inheritance. In most cases , inheritances are considered separate property, meaning they belong solely to the recipient and are not subject to division in a divorce. However, there’s a caveat. If the inheritance was commingled with marital assets or regularly used for the marital household, it could become subject to division.
Now, let’s talk about pre -marital dollars. Money acquired before marriage is typically considered separate property and would remain so in the event of a divorce. However, things get murky when those pre-marital funds are mixed in joint accounts or used for marital expenses.
So, what’s the bottom line? Inheritance and pre-marital dollars can be protected in a divorce, but it requires careful planning and documentation in advance. Although no one enters a marriage believing they’ll get divorced, it’s important to consider that possibility and plan accordingly. Keeping these assets separate and clearly identifying them as such can help safeguard them in the event of marital dissolution.
Remember, every divorce case is unique, and laws vary by state . Consulting with a qualified attorney who specializes in family law is crucial to understand individual rights and navigate the complexities of asset division.
Divorce is never easy, but with the right guidance and preparation, inheritance and pre-marital assets can be protected, allowing both parties to move forward with financial security and peace of mind.
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