Losing a loved one is never easy, and while an inheritance does not erase that pain, it can be an important key to upholding a family legacy. Unfortunately, even inheritances are not strictly immune to divorce. Depending on how a person treats his or her inheritance, it might be considered marital property under Michigan family law.
Inheritances generally — although not always — start out as separate property. Separate property does not have to be split up during property division, and generally includes things like assets a person owned before marriage and gifts he or she received after tying the knot. If left exclusively to an heir, and not the heir and his or her spouse, an inheritance is separate property.
So what can happen to cause an inheritance to make the jump from separate to marital property? It is all in how the heir treats it. For example, if an heir deposits the inheritance in a joint bank account and uses the funds for marital expenses, then it will be considered marital property. Even if kept separately, using inheritance money for significant marital expenses like improving a marital home can lead to it being marital property.
Keeping an inheritance separate from marital property and expenses is key to ensuring that it is considered separate property in the event of a divorce. However, in some situations, a Michigan couple might choose to address inheritances and property division through a carefully worded prenuptial agreement. No matter which route a person chooses to take, an experienced family law attorney might be able to provide clarity on any part of this topic that is confusing or otherwise unclear.