The ending of a relationship and a divorce is a stressful and chaotic time for the entire family. During a divorce, the parties have to make a lot of critical decisions, including where the children will live, who gets the house, and how they will divide up their marital bills, just to name a few. Property division is often one of the central issues in any case, as before and during a marriage, parties may have amassed significant assets from a variety of sources. 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.
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 division 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 parties treat that asset. This most often happens through a process called “commingling,” which means that the parties have mixed together 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 money is placed in a separate account only in the name of the spouse that inherited the money, it will likely maintain its nature as a non-marital asset. However, if the parties then deposit marital funds into that account and use the proceeds to purchase a marital 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 initial inheritance.
Property division and inheritance are complicated and you need an experienced attorney on your side. Call us today and we will talk with you about your case.