When a marriage is headed for divorce, one thing the parties often focus on is who will get what in the divorce. The division of debts and assets is part of every Tennessee divorce process; however, the process of dividing assets and debts can be fairly simple or extremely complicated and contentious. If you received an inheritance during the course of the marriage, you may be wondering what happens to that inheritance in a divorce. To help answer that question, a Murfreesboro divorce attorney at Bennett | Michael | Hornsby explains how an inheritance is treated in a Tennessee divorce.
Tennessee Divorce Basics
In every Tennessee divorce, property and assets, along with debts of the marriage, must be divided. Ideally, the parties can reach an amicable
settlement agreement that covers the division of assets and debts without the court’s intervention. If that is not possible, the court will use the “equitable division” standard to divide the marital property. This does not necessarily mean the property will be divided equally. It only requires the court to make a just and fair division of marital property.
Marital vs. Separate Property in a Tennessee Divorce
In a Tennessee divorce, only marital property is subject to division in a divorce. Separate property remains the property of the owner. Tennessee Code § 36-4-121 governs the division of property and defines what is considered marital property and what is separate property. As a general rule, “property acquired by a spouse at any time by gift, bequest, devise or descent” is separate property for purposes of the division of property in a Tennessee divorce. That means that an inheritance, whether received prior to or during the marriage, is presumed to be separate property.
When Might an Inheritance Be Treated as Marital Property in a Tennessee Divorce?
While an inheritance starts out as separate property, there are two situations in which an inheritance could become marital property and, therefore, subject to the division of assets in a divorce.
The first way in which an inheritance can be converted to marital property is through “co-mingling.” Co-mingling involves mixing an inheritance with marital assets to the point where a court cannot separate the inheritance from the marital assets. Unfortunately, people often co-mingle assets without intending to change the assets from separate to marital property. By way of illustration, imagine that you received $100,000 in an inheritance and deposited those funds into a joint account with your spouse during the marriage. That joint account was then used to pay marital expenses, such as a mortgage payment, utility bills, and other household expenses. That $100,000 inheritance could be co-mingled to the point that a court would consider it marital property in a divorce.
The second way that an inheritance can be converted to marital property is less common, but more straightforward. Transmutation occurs when inherited property or assets are converted to marital assets through a pre or postnuptial agreement or in another way where there is a clear intent to change the character of the marital property. For example, if you inherited a vacation home from a parent and you titled that property jointly with your spouse after inheriting it, the fact that you put your spouse’s name on the title would likely be viewed as an intentional change of status from separate property to marital property.
If you inherit property during a marriage, and intend to keep that property as separate property, it is always best to consult with an experienced divorce attorney before you do anything with the property or assets to prevent unintentionally changing the status of the property should a divorce occur down the road.
Contact a Murfreesboro Divorce Lawyer
If you have questions or concerns about how an inheritance will be treated in a Tennessee divorce, consult with an experienced Murfreesboro divorce lawyer at Bennett | Michael | Hornsby as soon as possible. Contact the team today by calling 615-898-1560 to schedule your free appointment.
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