Protecting Your Inheritance In Divorce


Inheritance in Divorce

Many people have been (or are going to be) blessed by their families in the form of receiving an inheritance.  Naturally, you’re going to want to protect your inheritance in divorce.  Keep reading to learn what you can do, or CONTACT US to schedule a consultation with a lawyer to come up with a plan.

Paper heart cut next to scissors and two rings.  Paper couple with a child are next to it.  Divorce is written at the top with wooden letters.

Which of the following applies to you?


I received my inheritance before we filed for divorce.


While it is very hard to lose a loved one, they were generous and left you a gift.  You may or may not be able to protect some or most of that gift during the divorce, depending on what you did with the inheritance after you received it.


  •        I put it into an account that is in my name alone (not the name of my spouse, or jointly with my spouse).


Well done!   That is exactly what you need to do to give it the best protection.  When this is the case, then usually only the growth in the account would be divided.  The base amount would be yours alone.  For example, if your original inheritance was $100,000, and it’s grown by $20,000 during the marriage, then you likely will keep $110,000.  This is how that division would look:


Description                            Amount                      Person 1                    Person 2

Original Inheritance             $100,000                   $100,000                   $0

Growth in Value—               $20,000                      $10,000                      $10,000

Equally divided

Totals:                                    $120,000                   $110,000                   $10,000


  • I put it into a joint account with my spouse, or I gave some to my spouse, or I paid off assets or debts that are jointly titled with my spouse.

Sorry to break the bad news, you will probably have to divide it with your spouse.  The technical term is that it is a “gift to the marriage”.  This is one of the biggest mistakes that people make before a divorce—they do not keep separate property separate.  Learn more HERE about how to keep separate property separate.


  1. I received my inheritance during the divorce process.

What a blessing to receive your inheritance during a time of life that you really need it.  You certainly want to protect it as part of your nest egg going forward.  Just like if you received an inheritance before the divorce, only the growth of your inheritance is divided UNLESS you made the biggest mistake and put it in a joint account.


  1. I received my inheritance after the divorce.

If you start spending the money then your inheritance might count as income.  That may affect your child support and/or maintenance.  Make sure that you consult with an attorney to ensure that you’re not going to create problems for yourself.


  1. I anticipate receiving an inheritance in the future and we’re negotiating in divorce.


Typically, future inheritance is not considered in a divorce.  This is because it is not guaranteed, and we don’t know how much it may be.  A very important exception is if you are the beneficiary of a trust.  If you are a trust beneficiary then it is very important that you consult with an attorney that is experienced with both trusts and divorce.  RLC is one of the only firms in Colorado who actively practices in both areas.


This is only the first aspect of inheritance during divorce.

The next question is if you are getting income from the inheritance now, how is that considered or divided?  Watch for a blog on that question coming soon.


These are only general summaries of the many and intricate rules of how an inheritance can work in a divorce.  Ensure that you are protecting yourself and your investments by contacting us today for a consultation to see how we can help you.


Want to learn more?  Here are further articles:

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