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No one wants to think about losing a loved one but when it happens, sometimes it can also bring surviving family members a bit of financial security in the event that they receive an inheritance. During a divorce, people often fear losing that financial security because they believe their inheritance will be divided as part of divorce proceedings. So, what will happen to your inheritance during a divorce?
Illinois is an equitable distribution state when it comes to divorce. This means that in the event that the couple cannot come to a fair and mutual agreement on their own, a judge will divide the marital property fairly, although not necessarily 50/50. Marital property includes assets that were acquired during the marriage, while separate property includes any assets that one spouse acquired before the wedding and brought into the marriage with them.
Under Illinois law, inheritances are not considered marital property. This holds true even if the inheritance was accepted after the two spouses were already married. However, there are times when inheritances are considered marital property and so, it is important that all individuals know how to protect theirs.
Even though inheritances are considered separate property in Illinois, there are times when a spouse may place their own inheritance in jeopardy. For example, if a spouse received an inheritance and placed those funds into the marital banking account, it then becomes commingled with the marital funds.
Once that happens, it is impossible to tell whether the inheritance was used solely for the needs of the spouse that inherited it, or if those funds were used for marital assets, such as making mortgage payments. It is for this reason that anyone that receives an inheritance should always keep it in a separate bank account.
Without a separate bank account, the only way to protect the inheritance is through a premarital or postnuptial agreement. These agreements can specify that the inheritance is the property of one spouse, regardless of how those funds are used.
When these agreements are in place, a spouse can use the inheritance however they choose, including making mortgage payments and contributing to the household’s needs, such as purchasing groceries. In these instances, it is still best to keep the funds in a separate account, as this will make it easier to determine how much of the inheritance has been spent, and how much is left.
Property division during divorce can quickly become confusing, but there are many other aspects of divorce that are complex, as well. At the Law Office of Martoccio & Martoccio, our skilled Hinsdale divorce lawyers can help. Our skilled attorneys can assist you with the divorce process, protect what is rightfully yours, and help you secure the best settlement possible. If you are considering divorce, or the process has already started, call us today at 630-920-8855 or contact us online to arrange a free initial consultation with one of our attorneys.