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What is a commingled inheritance during divorce?

On Behalf of | Sep 28, 2023 | Family Law

Most of the time, an inheritance starts out as a separate asset that is owned by one person. Even if that person is married at the time that they receive the inheritance, it is still a separate asset.

For instance, maybe you got married five years ago. Last year, your parents passed away and you inherited a significant amount of money in your own name. Other assets that you and your spouse have acquired together – like a family home – are shared assets. But your inheritance likely starts out as a personal asset that you own and your spouse does not.

Mixing it together

This distinction is important because it means that you would likely not have to divide that inheritance if you got divorced. It’s a separate asset and you would simply get to keep it.

But the status of that inheritance can change if it is mixed together with other funds. Say that you and your spouse have an investment portfolio that you both use or a bank account that you can both access. If you put the money from the inheritance into these shared accounts, that commingles it and means that it is now a marital asset that would have to be divided in a divorce.

Comingling can also happen when a couple uses the money to purchase shared assets. The inheritance may initially be yours, for example, but it is commingled if you and your spouse use the money to buy your dream home.

Splitting up assets

Commingled assets are one thing that can make a divorce process more complicated. If you find yourself in this position, it’s very crucial that you know how to split up assets and what legal steps to take at this time.