As you go through your divorce, you understand that much of your property is up for division. Your spouse can claim a portion of your home, bank accounts, retirement accounts and more. But do you have to give up part of an inheritance you received?
In Colorado, a court will consider your property to be either separate or marital. Inheritances and gifts are separate property and free from divorce proceedings. But depending on how you stored and used your inheritance, a court may consider it up for division.
An inheritance is separate property
During property division in Colorado, a court can divide anything considered marital property. Typically, this includes anything of value that you received while married. Any money, possessions or real estate acquired during the marriage can be marital property, even if only your name is on it.
Gifts and inheritances are separate from this rule. If your parent or relative left you a fortune, your spouse cannot claim it as marital property, regardless of when you received it.
When an inheritance becomes marital property
However, if you mix your inheritance with marital assets, a judge may be able to divide it. Putting inherited money into a joint account or spending it on your house or other shared assets can turn it into marital property.
If your inheritance grows in value through home equity or investment accounts, anything above the original value is also marital property.
Keeping inheritance separate
If you don’t want your inheritance to become marital property, you should keep it in a separate bank account and avoid spending it on shared assets. The less you commingle inherited assets with your marital property, the better your chances to keep them whole in divorce.