The ending of a relationship and a divorce is a stressful and chaotic time for the entire family. During a divorce, people have to make a lot of hard decisions, including where the children will live, who gets the house, and how they will divide up bills, just to name a few. Dividing property is often one of the central issues in any divorce, because the couple might have gathered significant assets from a variety of sources, both before and during a marriage.
One of these sources can be inheritance. The laws surrounding division of inheritance can be complicated and nuanced, and it is important for anyone going through a divorce to have a basic grasp of how they work – even if they never plan to set foot inside a courtroom.
Property division in divorce is governed by Minnesota statute. The general rule is that property acquired before marriage is non-marital property and property acquired during marriage is marital property.
Non-marital property is not subject to being split up in the divorce, while marital property is subject to an equitable division. A very important exception to the rule that property acquired during divorce is marital property is inheritance. Even if an asset is acquired by a spouse during marriage, if that asset is acquired as a result of an inheritance, that property is non-marital property.
Like other non-marital assets, however, inheritance can change from a non-marital asset to a marital asset, depending on the way the couple treats that asset. This most often happens through a process called “commingling,” which means that the couple have mixed non-marital assets and marital assets. When that occurs, the asset that was previously a non-marital asset becomes a marital asset.
An example of this would be if one spouse receives a sum of money through inheritance. If the inheritance money is placed in a separate account, in the name of the inheriting spouse only, the inheritance is likely to stay non-marital. However, if the couple later deposited marital funds into that account and used it to purchase a home, then the account and the house are likely marital assets. This is true even if the account and the house are titled only in the name of the spouse who received the inheritance in the first place.
As you can see, property division and inheritance are complicated. If you and your spouse are having a hard time sorting through this issue, register today to gain access to additional information and assistance from Diyvorce.
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