Typically, when someone receives an inheritance from their parents or another extended relative, such as a grandparent, it initially counts as a separate asset. It is something that they own individually because that relative distinctly meant to give it directly to them.
What this means is that if someone gets an inheritance while they’re married and then gets divorced, they may get to keep the entire inheritance. Other financial assets acquired during the marriage may count as marital assets, meaning they would have to be split up. But separate assets do not need to go through property division, so that individual can keep their inheritance, despite their marital status.
Commingling the inheritance
However, things can change depending on what they do with that inheritance after they receive it. If they commingle it, then it can become a marital asset that has to be divided.
Commingling just means that the inheritance is mixed with the other assets that the couple owns together. An example could be putting that inheritance into a shared bank account or investment portfolio.
It can also commingle the inheritance to use it for other shared assets. If the couple uses the money just to pay the bills and make ends meet, that can commingle the funds. If they buy a joint asset like a family business or a family home, that can commingle the inheritance, as well.
Resolving a dispute
In many cases, couples get into disputes over what should be done with an inheritance and who has a right to it. When they find themselves in this position, it’s important for them to understand what legal steps to take.