Your parents left you a hefty inheritance when they passed away five years ago. You were already married but you do not have any children, so you didn’t spend the money on college tuition or anything of that nature. You just set it aside for the day you retired, knowing you would now be able to do so at a very comfortable level.
This year, though, you and your spouse have decided to end your marriage. You’re nearing retirement age and so is your spouse, and now he or she is saying that half of the inheritance should go to them so that they can also retire at the level they expected. You counter that the money was meant for you, not for your ex, and that it will stay with you. Who is right?
What did you do with the inheritance?
In one sense, you are probably correct. An inheritance tends to be legally viewed as separate property that belongs only to one person and that does not have to be split up along with other assets. The law understands exactly what you do: That your parents intended their money to stay with their children, not with someone who used to be married to their child.
That said, you can change this status by commingling the inheritance. The most common example of this is by letting your spouse use the money while you’re married. Maybe you put it into a bank account that you both shared, for instance, or maybe you used some of it for mortgage payments and other joint expenses. This shows that you certainly thought of the money as something both you and your spouse owned, and so it can be viewed that way when you split up. This would mean that you may have to divide it with your ex.
On the other hand, if you kept the money to yourself — or didn’t use it at all, as in this example, where you saved it for retirement — then it can still be a separate asset. Your ex may have expected to retire on it, but they have no right to that money.
Fighting divorce battles
Your divorce could become contentious with financial questions like this. Always be sure you know what rights and options you have.