One of the more challenging aspects of a divorce is the division of marital assets. Usually, the longer a couple is married, the more assets are intermingled in each other’s lives, such as your home or other real estate, retirement funds, stocks, and other valuable property or items. One of the things that is sometimes particularly difficult to navigate when dividing property is when one spouse has received a large inheritance or is soon to receive one.
Managing Inherited Assets During A Divorce In Alabama
Alabama is an equitable distribution state, meaning marital assets are divided between the couple according to what the court deems fair and equitable. Depending on the circumstances of the couple, the outcome will vary. The very first step in this division of property is figuring out which existing assets count as marital property versus separate property.
- Marital property will include assets or debts that were accumulated during the marriage. Marital property is the only property that is divided in a divorce.
- Separate property is any property or assets that belonged to a spouse before they were married or anything that does not fall into the category of marital property. This includes inheritances. Separate property remains unaffected during the divorce and entirely with the spouse who owns the assets.
So, how do you determine what inheritance falls under? There are a few ways to assess this and some exceptions to the rule.
Exceptions for the Rule
Generally, inheritances are not included in the marital estate during a divorce. However, once you begin to mix your inheritance with any marital funds, determining if the inheritance is still considered separate property may become a more elaborate challenge. If you want to keep your inheritance to yourself, take this into consideration and be aware of the law.
There are some notable scenarios that an inheritance could be considered marital property:
- Both spouses had access to and used funds that were deposited from the inheritance to a couple’s joint bank account
- When the couple used the inherited funds as a down payment to purchase a shared home or property
- Renovations or other improvements to that shared residence were paid for with the inheritance funds
- The couple used the inheritance funds to start a business together, which they both own and work in
- If the inherited funds were used for any other expenses that the couple shared
As a rule of thumb, any time it is difficult to determine what funds are considered separate and which belong to both spouses, they will be regarded as part of the marital estate. If both spouses cannot work out the division of property and assets, their attorneys will have to present arguments and specific circumstances to the court. The court will inevitably have the final say in the decision.
How Inheritance Affects Alimony and Spousal Support
Inheritances received by either spouse may affect how spousal support is treated in divorce proceedings. The amount that each spouse makes is a key factor when determining spousal support; the lower-earning spouse’s financial needs are compared to the financial capacity of the higher-earning spouse.
- If the higher-earning spouse inherits significant assets or a large income, this could affect the amount they pay in spousal support.
- If the lower-earning spouse receives an inheritance, depending on the amount, their need for alimony might decrease or be eliminated.
Inheritances will only impact an Alabama divorce if one spouse already has received it or if they will receive it once a deceased family member’s estate is settled. Any anticipated inheritances from a living family member should not factor into the divorce.
Alabama Divorce Attorneys At Brackin Law Firm
If you are going through a divorce and are curious how your inheritance might affect it, seeking advice from an experienced attorney can help you determine marital and separated assets. You may also be anticipating an inheritance soon and need legal advice on protecting it or safely using it in your marriage. Either way, an Alabama divorce attorney can help you make the right decisions.
Divorce is stressful, and separating your whole life can be an emotional and challenging task. With proper guidance and more understanding of the law, divorce proceedings and separating assets can become a less daunting experience. We are here to help during this time. Brackin Law Firm has experienced divorce attorneys who help those in Baldwin County, we practice Criminal Defense, Family Law, Estate Planning, Elder Law, Automobile Injuries, and Real Estate Matters.
Contact us today and schedule a consultation.