If you have come to the difficult decision that your marriage is over, you are likely wondering what will happen to your assets. A common area of concern is an inheritance, specifically whether or not the funds or property you receive are shielded from division during the divorce process. Please continue reading to learn how inheritances are typically treated during a New York divorce and how a knowledgeable Nassau County Property Distribution Lawyer can help protect your financial future.
How is Property Distributed in a New York Divorce?
When facing a divorce in New York, the critical first step in determining whether an inheritance will be subject to division is understandinghow the court categorizes your property:
- Marital Property: Assets acquired during the marriage (e.g., income, joint accounts, property bought together).
- Separate Property: Assets owned before marriage or received as individual gifts/inheritances.
New York, like many states, employs equitable distribution for marital assets and debts. This means your marital property will be split fairly, not necessarily equally. Courts consider statutory factors such as the marriages lenght, contributions (financial and non-financial), established lifestyle, earning potential, economic circumstances, and future needs. It is important to note that separate property is usually excluded from division.
Can I Lose My Inheritance?
After receiving an inheritance, you are likely worried you’ll lose it in a divorce. While inheritances are primarily seen as separate property, meaning they are excluded from division, they can become marital property under specific circumstances. An inheritance can become marital property by:
- Blending Funds (Commingling): Placing inherited funds into a joint account used for shared expenses.
- Using for Marital Expenses: Applying the inheritance to pay down a mortgage, purchase shared property, or cover daily household necessities.
- International Gifting (Transmutation): Adding your partner’s name to the title of inherited property or using the funds as a down payment for property that is jointly held.
- Appreciation Due to Shared Effort: If the asset’s value increases significantly because of the applicaiton of shared marital funds or significant management by the spouse, that increase in value may be considered marital.
- Income Generated by the Asset: The earnings produced by the inherited property, such as rental payments, may be classified as marital income, even if the asset remains separate.
How Do I Keep My Inheritance Separate?
To keep inherited assets as separate property, it is crucial to maintain the funds in an individual account rather than a joint one. Additionally, avoid using the inheritance for shared marital expenses or for assets that are titled in both names. You should refrain from adding your spouse’s name to the title of any inherited assets. Meticulous documentation is necessary to establish the source of these funds. This is vital for tracing. New York courts rely heavily on tracing to verify that the inheritance can still be distinctly linked to its separate origin. If the funds are commingled, they will lose their status and be subject to equitable distribution.
For more information, please don’t hesitate to contact a lawyer at the Law Offices of Eyal Talassazan, P.C. Our legal team is prepared to help protect your rights and interests.
