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Could you lose your inheritance in your divorce?

In Indiana, the general rule that's followed when it comes to marital assets is that everything that a couple earns or acquires after they get married gets put together in one pot, to be divided up if they divorce as equally as possible.

Property that's received as part of a gift or an inheritance that is given to just one spouse is normally considered separate property.

However, like most things in the law, there are some exceptions to the rule. Your inherited property can easily go from being "yours alone" to "yours together with your spouse" under the right circumstances.

To determine if your inheritance is likely to be considered part of the marital pot, ask yourself the following questions:

1. Was it inherited prior to the marriage? If so, that strengthens the argument that your inheritance was always yours alone.

2. If it was, did you keep your spouse's name off the property or account? If you did, fantastic. Again, that strengthens the argument that the property was always intended to be your private property and treated as such.

However, if you put your spouse's name on the bank account or deed back in better times -- even just in case something happened to you and there was an understanding that he or she wasn't to use it or sell it -- that weakens your argument.

3. Did you mix marital funds in with the inherited assets? For example, if you inherited $30,000 and put the money into an IRA or 401K or some other savings and investment tool, have you continued to add money to it? If so, that money came out of marital funds and it means that you failed to separate the two. That would very much weaken your case that the inherited part should belong solely to you.

Keep in mind that the trial court isn't likely to view any one factor when making their decision. They will likely consider the totality of the circumstances before deciding if and how to divvy up inherited assets during the divorce.

For more information on property division and inheritance or to discuss your case, talk to an attorney today.

Source: FindLaw, "Inheritance and Divorce," accessed April 21, 2017

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