Inheritance and Gifts in Divorce

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Inheritance and gifts in divorce are often treated as separate property, but their classification can change depending on how they were used or commingled during the marriage.

Many couples are surprised to learn that not everything acquired during a marriage is automatically considered “marital property.” Two common categories that spark confusion—and sometimes heated disputes—are inheritances and gifts.

So, are they still considered separate property in divorce? The answer is yes—but with some important exceptions.

What Counts as Separate Property?

In most states, property is divided into two categories during divorce:

Marital Property – Assets and debts acquired by either spouse during the marriage.
Separate Property – Assets owned before marriage, as well as inheritances and gifts given to one spouse, even if received during the marriage.

Inheritances and personal gifts (like jewelry, cash, or real estate given specifically to one spouse) are generally classified as separate property.

When Inheritance or Gifts Remain Separate

Your inheritance or gift will usually remain yours alone if:

It was given specifically to you, not to you and your spouse jointly.
It has been kept in a separate account, apart from marital funds.
You have clear documentation (a will, letter, or deed) showing it was meant for you.

For example, if you inherited money from a parent and deposited it into a bank account in your name only, it is much easier to argue it is your separate property.

When Inheritance or Gifts Become Marital Property

The line between separate and marital property can blur. Here are common ways separate property may lose its status:

Commingling of Funds
If you mix your inheritance money with joint accounts or use it to pay for marital expenses, it may be considered marital property.
Putting a Spouse’s Name on the Asset
For example, if you inherit a house but later add your spouse’s name to the deed, you may have legally transformed it into marital property.
Using the Inheritance to Improve Joint Property
If you use inherited money to renovate the family home, a court may consider it marital property—or at least grant your spouse an interest in it.

State Law Matters

The rules can differ depending on whether you live in a community property state or an equitable distribution state:

In community property states (like California or Texas), inheritances are usually protected as separate property unless commingled.
In equitable distribution states, courts aim for fairness, and while inheritances may remain separate, judges can sometimes consider them when deciding overall property division.

Protecting Your Inheritance or Gifts

To preserve your inheritance or gifts as separate property, consider:

Keeping the asset in your name only.
Avoiding mixing funds with joint accounts.
Keeping clear records (bank statements, wills, or gift letters).
Using a prenuptial or postnuptial agreement to define what happens in case of divorce.

While inheritances and gifts are generally considered separate property, the way they are handled during the marriage can change everything. If you want to protect what’s rightfully yours, avoid commingling, keep good records, and seek legal advice before making any big decisions about those assets.

Inheritance and Gifts: Are They Still Considered Separate Property in Divorce?