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Protecting gifts and inherited assets from division in a divorce

| Jan 27, 2017 | Family Law |

Many people who begin the divorce process assume that any inheritance or gift they received as an individual while they were married will be theirs to keep and won’t be subject to property division. However, that’s not always the case. It all depends on how you handle the funds or other assets that are given to you.

The important word to remember here is “commingling.” Once separate assets are commingled with marital assets, they become marital property and are subject to equitable distribution here in North Carolina.

Obviously, you may choose to commingle assets that are gifted to you by a family member or that you inherit to buy a house, pay off loans, save for your kids’ college education or any number of things that you and your spouse need or want. However, if you want to hold some for yourself so that you have a nest egg if the marriage ends, there are some things you need to avoid. For example:

— Don’t deposit them into a joint account on which your spouse is a co-owner.

— If you place them in a separate account in your name only, don’t deposit marital assets into that account.

— Don’t use them to purchase, upgrade or do maintenance on a home that you and your spouse own together.

A good way to avoid issues with inheritances and gifts is to have a prenuptial or postnuptial agreement in place stipulating that gifts and inheritances for each spouse will be considered separate property. This is a good idea, even if you have no expectation of either. Of course, you still need to follow the rules about commingling. A North Carolina family law attorney can provide advice and guidance.

Source: Forbes, “Divorcing Women: Here’s How to Protect Your Inheritances And Gifts,” Jeff Landers, accessed Dec. 28, 2016

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