You’ve been diligent about your estate planning, and left a sizable chunk of your estate to one of your children. But what happens if your child receives an inheritance, then gets divorced? Will part of the inheritance money go to your child’s ex-spouse? Not necessarily. There are ways to protect inheritance money during divorce.
In Ohio, inheritance money that is not properly protected can be classified as marital property that will be divided equitably between the beneficiary and his or her ex-spouse. But with a little bit of planning, you can avoid having property you leave to one of your children end up in the wrong hands. And in the process, you can eliminate a potential source of costly and protracted litigation during your child’s divorce proceedings.
During a divorce in Ohio, assets are classified as either marital property or separate property. To determine whether property is marital or separate, Ohio courts consider the following factors:
Separate property includes real and personal property that falls into one of the following categories:
Looking at the definition of separate property, it would appear that separate property is any property left to one spouse. But be careful - commingling separate property with marital property could destroy the identity of the separate property, making it marital property that must be shared between the divorcing spouses.
A common example of commingling is when a spouse receives an inheritance and deposits the inheritance money into a joint bank account. Another example is when a couple uses one spouse’s inheritance as a down payment to purchase a home. Unless the spouse who received the inheritance can prove the inheritance money went to purchase the home, a court might declare that the down payment was marital property.
To protect inheritance money during divorce, you want to avoid having property classified as marital property. To do so, it is important to be able to trace the source of the inherited property by maintain records proving that the inheritance was separate property.
There are a few steps you can take to preserve the separate identity of an inheritance.
If you want to protect your child's inheritance in case of a divorce, contact a skilled and experienced Ohio probate and estate planning attorney today.
At Wolfe Legal Services, I work with people throughout greater Columbus, including Dublin, Bexley, Upper Arlington, New Albany, Marysville, Hilliard, Delaware, and Newark, and throughout Franklin County, Delaware County, Pickaway County, Fairfield County, Union County, and Licking County. Call (614) 263-5297 any time or complete our online form.