Is My Inheritance Considered Marital Property in Colorado?
When you receive an inheritance during your marriage, those funds or other assets are considered separate property under Colorado law. That means if you were to file for divorce, those funds would not be split as a component of your divorce, even if you received them during your marriage. It is critical to understand this if you are considering divorce but want to preserve your inheritance. Talk to a Broomfield property division lawyer from Danielsen Westhoff, PC, today.
Your Inheritance Is Not Part of Your Marital Property
Under C.R.S. 14-10-113, an inheritance is not considered a component of marital property. Inherited property that is received as a gift or inheritance is considered separate assets not owned by the marriage. As a result, it is not subjected to division by the court in the case of a divorce.
Marital property, by comparison, refers to any assets built during the marriage. That may mean that if you and your spouse purchase a home together during the marriage, you have equal rights to it. Wages earned during a marriage by either spouse are marital property in most cases as well.
The Value Above Your Inheritance May Be Marital Property
In situations where you received an inheritance and put it into the bank or invested in it, and the value grew during the marriage, that added value is considered marital property under the state’s laws. That means that the court can order you to divide those earned assets in the divorce.
Also, note that if you deposit the funds from your inheritance into a joint account, the court may be unable to separate them. They may become commingled, which means they mix with the other assets there and demonstrate that you shared them with your spouse. As a result, this can be considered marital property. If you used your inheritance to pay for joint expenses within your marriage, such as your rent or mortgage payments, it is even more limitedly possible to protect those funds from being considered marital property.
How to Protect Your Inheritance in Case of Divorce
When you know you are receiving a significant inheritance, and you have concerns about divorce, avoid depositing those funds into a shared or joint account. Avoid using the funds to pay your household bills. Doing this helps to ensure they are kept separate and not combined with the household assets. This can minimize the risk of the court dividing those assets as an equitable part of your divorce proceedings. You can keep those funds separate from other family budgetary funds.
If you are unsure if your inheritance will be considered a component of marital property, it is best to speak to your divorce attorney about the legal options available to help you protect those assets. This is true whether you are receiving significant assets in cash, investments, or other valuable goods. Taking a few steps now to protect your right to keep those funds separate in case of divorce could be critical to preserving your finances down the road if there is a need to do so.