Many parties entering marriage or contemplating divorce have concerns about how Florida law treats inheritance in a Florida divorce. “Marital property” generally includes assets, such as money in the bank, real estate, income, stocks, pensions, etc., that has been acquired during the marriage and subject to equitable distribution between spouses in a divorce. However, any inheritance during the marriage made to an individual spouse is considered the separate property of that spouse.
While this aspect of property distribution in divorce might lead some to think that their inheritance will not impact the divorce process, this conclusion would be inaccurate. If you inherent an asset like real property prior to marriage but use your income from employment or other assets acquired during marriage to improve the real property, the commingling of separate and marital property interests will mean that the inherited real estate now has both a separate and marital property component. The spouse who did not inherit the property will have a right to a portion of the asset that was improved with commingled funds. This interest will entitle the spouse to both half of the principle contributed to the asset as well as a portion of any appreciation that resulted from the contribution of marital funds.
There are a variety of ways to prevent a spouse from developing an interest in one’s inheritance. The best way is to execute a prenuptial agreement (also referred to as an antenuptial agreement) that clearly articulates the way distribution of property and alimony will be handled in the event of divorce. Because a prenuptial agreement must be carefully drafted, it is highly recommended that you obtain legal advice from an experienced Florida family law attorney. Anyone entering a marriage who may receive a substantial inheritance should consider the preparation of a prenuptial agreement in order to avoid confusion, conflict and unanticipated consequences in the event of divorce.
Another way to protect inheritance during a divorce is to avoid ANY commingling of the inheritance with community funds or assets. Inheritance should not be deposited into a joint bank account that also contains marital funds. Furthermore, you should avoid using marital funds to improve separate property that you may have recently inherited. While there are ways to trace contributions to calculate separate and marital property contributions and the respective appreciation, the easiest way to protect your separate property interest in an asset is to avoid commingling.
Alimony awards may also be impacted by the inheritance received by a party to a Florida divorce. For instance, a court is required to find that a party has a need for alimony and that the other party has the ability to pay before it considers the relevant factors enumerated under Fla. Stat. Sec. 61.08(2) to determine the proper type (i.e., bridge-the-gap, rehabilitative, durational, or permanent) and amount of alimony. Naturally, a substantial inheritance can improve the ability to pay of the higher-earning spouse or reduce the need of the lower-earning spouse. No matter where you are located, experience and knowledgeable West Palm Beach family law attorney James S. Cunha and his legal team are just a phone call away.