Protecting an inheritance in the event of a divorce

If you receive an inheritance during marriage and later get divorced, does your spouse get to share in it? The answer varies depending on the circumstances. As a recent New Jersey case tells us, a key factor is how you treated the inheritance when you received it.

In that case, a married woman received an inheritance when her daughter from a prior marriage passed away. The inheritance consisted of $162,000 in life insurance proceeds and assorted other assets. The woman initially parked the money in a joint checking account but later put it in a CD that was in her name only.

When she and her husband got divorced, her husband wanted the money included in the marital estate so he could take his share. But the family court judge rejected his demand and a New Jersey appellate court upheld the ruling. Specifically, the court said that based on how the woman handled the proceeds, she showed no “donative intent.” In plain English, that means there was no evidence that she meant for the money to be shared at any point at all.

Had the wife commingled the money with marital assets, the case may have turned out differently. For example, had the CD been in both spouses’ names, or had the wife kept the money in the joint account, the court might have ruled that the husband had a right to at least some of it. Either way, if you’ve received an inheritance that you hope to protect in the event of a divorce, talk to a family law attorney to find out what options you might have.

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