An inheritance can be an important part of many families’ financial health. It offers support and new opportunities, but it can also add complexity to property division in a divorce. What should you know about divorce’s potential impact on your inheritance?
How is an inheritance addressed in Colorado divorces?
Colorado courts use “equitable distribution” to divide marital property, working to find solutions that are fair but not necessarily strictly equal. However, this only applies to marital property. Some property—including gifts or inheritance received by only one spouse—is considered separate during this process.
Can my inheritance become marital property?
While a person’s inheritance is generally considered their separate property, your spouse may still receive some of your inheritance during property division.
One cause for concern is if your inheritance has become mixed or “commingled” with your jointly-owned property during the course of your marriage. This can occur if you used inherited funds to maintain jointly-owned real estate, for example, or if you deposited your inheritance into a joint account.
Even if you did not commingle your inheritance with your marital assets, your spouse may also be entitled to a portion of the current worth of your inheritance if it has appreciated in value. In Colorado, the courts consider any increase or decrease in the value of your separate property in divorce, and your spouse may receive a portion of any appreciation that occurred.
When dealing with the financial complexities of divorce, it can be helpful to have experienced legal guidance. An attorney can help answer your questions about divorce and your inheritance and create legal strategies that protect this important part of your finances.