How is Inheritance Handled in an Illinois Divorce?
When a married couple decides to divorce, they are faced with several complex financial matters. Money and property inevitably become intertwined during a marriage, and dividing these assets can be a complicated and emotionally charged process. Property acquired by inheritance can be a sticking point. This blog will discuss how assets obtained through inheritance are handled in a divorce case.
Is Inheritance Considered Joint Property?
There are two main classifications of property in an Illinois divorce. Marital property is jointly owned by both spouses. Non-marital property or separate property belongs to only one spouse. Assets the spouses owned prior to getting married are non-marital assets while assets acquired during the marriage are marital assets. Typically, money or property that a spouse receives in an inheritance is categorized as non-marital property regardless of when it was received. For example, if a man leaves a car to his married son in his will, the car belongs solely to the son. However, several different issues can complicate ownership of property acquired through inheritance.
Do Divorcing Spouses Share Money Acquired Through Inheritance?
In most cases, money, real estate, vehicles, family heirlooms, and other assets that an individual receives as an inheritance are non-marital assets. This means that the assets are not divided between the spouses during divorce. The spouse who inherited the property keeps the property.
Sometimes, however, inherited assets become mixed with marital assets. In a situation like this, the inherited assets may be considered marital property which is jointly owned by both spouses. For example, consider a woman who receives $25,000 from her grandparent. If she deposits this money into a joint checking account with her spouse, the money may lose its non-marital status. When the couple divorces, the entire contents of the joint checking account will be divided – including the money acquired by inheritance. This process is called “transmutation,” and it can complicate the asset division process during divorce considerably. Transmutation can also occur if a spouse contributes financial resources or non-financial effort to the preservation or increased value of an asset. For example, a vacation home acquired through inheritance may become marital property if the non-owning spouse helps maintain the home or marital funds are used for repairs and upkeep.
How Can I Protect an Inheritance from Division During Divorce?
If you inherited property or funds from a loved one, you may be interested in preserving the non-marital nature of the asset. Prenuptial agreements are often used to designate property as non-marital and ensure that the property belongs solely to the spouse who originally inherited it should the marriage end in divorce. If an individual is already married, a postnuptial agreement may be used for the same purpose.
Source:
https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm
