In Texas, an inheritance is considered separate property and not subject to division during divorce. Sounds simple, right? However, if you’re concerned about how to protect your inheritance from your spouse, it’s best not to assume anything is simple. In fact, you should take steps to ensure your separate property (i.e., inheritance) is recognized as such and protected, to keep what is rightfully yours. Here’s how.
Let’s be clear: Never, ever is your spouse entitled to your inheritance in Texas
As far as the court is concerned, the court cannot award separate property. It can only confirm separate property. This “fact” leaves many people believing they won’t have their separate estate (or inheritance) given to the other spouse. However, that’s not always the case. Property is presumed to be community property until a party rebuts that presumption by clear and convincing evidence and shows the property to be separate.
For some parties, issues arise because they have allowed funds from their inheritance to comingle with funds from the marital estate. We see this happen in cases where couples have been primarily living off of one party’s inheritance, and neither party works, or if the non-monied party does work, he or she doesn’t contribute much to the couple’s marital estate.
Should the couple decide to divorce, that’s usually when the monied party hopes to grab their inheritance and run. Unfortunately, if that party didn’t take proper steps to figure out how to keep inheritance separate property, the inheritance may be considered as part of the pot for the support system of both parties while the divorce case is pending (which could take months), or at least until a summary judgment is issued confirming separate property (more on summary judgments below).
How to keep inheritance separate from spouse
Whether you’re planning to divorce or simply want to be proactive about protecting inheritance from spouse for other reasons, there are steps you can take to maintain control of your inheritance and other separate property. In fact, we always encourage clients who enter into marriage with sizeable assets (or cherished family treasures) to take steps to have the courts confirm those assets as separate property.
If how to protect inheritance from divorce litigation is important to you, consider the following options:
Protect your inheritance with estate planning tools like a trust.
If you come into an inheritance, you should probably be searching for wills and estate lawyers near me before you get married and long before you even think about divorce. Old money wealthy people know the best way to protect an inheritance and other assets is to keep those assets separate from their estate, using estate planning tools like a trust. The more tangible access you have to funds from an inheritance, the more challenging it will be to protect inheritance from divorce settlement proceedings and your spouse.
Get a prenuptial or post-nuptial agreement to protect your inheritance.
If you’re concerned about protecting inheritance from divorce property division, be proactive and get a prenup or postnup. Not only can pre- and post-marital agreements give you the opportunity to confirm separate property, but they can also simplify things in the event of divorce.
When properly executed, prenups and post-nups literally spell out who owns what in the event of divorce, and typically include an inventory list, account numbers and related disclosures, among other details. You can also include provisions for protecting your business interests. For example, say you owned a business prior to marriage or you started a business afterward but believe you should reap the rewards for all of your blood, sweat and tears, you could use a pre- or post-marital agreement to keep your business interests separate from the marital estate.
Keep in mind, your current or future spouse will also need to sign the post-marital agreement or prenuptial agreement in order for it to be enforceable in court.
Seek a summary judgment from the court to preserve your inheritance.
Remember the scenario I mentioned earlier, where a couple was comingling funds while living primarily off of the inheritance of one of the parties? If you haven’t thought about how to protect your inheritance from your spouse or taken steps to confirm separate property, you could seek a summary judgment to define what portion of your estate is separate property. We don’t see this tactic used often because people usually pursue one of the tactics above (estate planning vehicles, prenups and post-nups) to protect their inheritances but it is an option in the days and months leading up to divorce.
Don’t get sloppy when handling your financial accounts.
Wondering how to protect inheritance from spouse after you’ve crossed your “T”s and dotted your “I”s? You should! Once you’ve put protective vehicles in place (like a trust, prenup or post-nup), you will also need to take steps to protect the integrity of those documents in the future. Life, business and financial circumstances change, and following certain operational procedures will help keep your inheritance intact.
For example, you might decide to sell a business at some point, need to move financial accounts because a bank is changing hands or find your investments would be better suited with a different broker. Whenever you need to start moving money around, thoughts about how to protect inheritance funds should remain an important consideration. Be sure to ask your attorney to cover important procedures pertaining to your protective agreements and contact him or her for advice as circumstances change.
We can answer your how to protect inheritance questions
If you live in the Dallas / Fort Worth metroplex or surrounding communities, the experienced family law attorneys at the Sisemore Law Firm are here to help. To schedule a confidential consultation with attorney Justin Sisemore, please contact our firm at (817) 336-4444 or connect with us online.
Photo Source: Canva.com
