Dividing assets during a divorce can be a complex process, especially when it comes to inheritances. In Texas, a community property state, the division of property depends on whether assets are considered community or separate property. Inheritances generally fall under the category of separate property, meaning they belong solely to the person who received them.
While inheritances are often protected, how they are managed during the marriage can affect their status. For example, commingling an inheritance with shared funds may convert it into community property, which can then be divided during a divorce. By knowing the key principles governing inheritance division, couples can navigate the process more confidently.
Separate vs. Community Property
Texas law divides property into two categories: separate property and community property. Community property includes assets acquired by either spouse during the marriage, such as income, real estate, and retirement accounts. Separate property, on the other hand, includes assets owned before the marriage, gifts, and inheritances.
To maintain an inheritance as separate property, the recipient must ensure it remains distinct from community property. For example, depositing inherited funds into a joint bank account can commingle the inheritance, making it harder to prove it as separate. Similarly, using inherited funds to purchase community assets—such as a family home—may also alter its classification.
If there’s any dispute over the classification of property during a divorce, the court may require clear evidence, such as financial records or a written agreement, to confirm the inheritance’s separate nature. Without this proof, the inheritance may be subject to division along with other marital assets.
How Inheritances Become Community Property
While inheritances typically start as separate property, certain actions can convert them into community property. This process, known as commingling, occurs when separate property is mixed with marital assets in a way that makes it indistinguishable.
Examples of commingling include:
- Depositing inherited funds into a joint account. Combining inherited money with shared marital income can make it harder to prove the funds were meant to remain separate.
- Using inherited money to pay for community expenses. For instance, paying a mortgage on a jointly owned home with inherited money can blur ownership lines.
- Investing inherited funds in shared assets. If the inheritance is used to improve or maintain community property, its separate nature may be compromised.
Avoiding commingling is key to protecting an inheritance during a divorce. Keeping detailed records and using a separate account for inherited funds can help preserve its status. Courts generally view commingling as a sign of shared ownership, which may lead to an inheritance being divided along with other marital property.
The Role of Evidence in Protecting an Inheritance
Proving that an inheritance is separate property requires clear and convincing evidence. Documentation, such as wills, trusts, and financial records, is critical in this process.
Spouses who wish to protect their inheritance should maintain detailed records of when and how they received it. For instance, keeping a copy of the will that specifies the inheritance can help demonstrate that the asset was intended for one spouse only. Additionally, setting up a separate account for inherited funds can prevent accidental commingling.
Failing to produce adequate evidence may lead to the inheritance being treated as community property. Some couples may consider signing a postnuptial agreement explicitly stating how an inheritance will be handled in the event of a divorce.
Contact Our Lawyer for Further Assistance
Inheritances in Texas divorces are generally treated as separate property, but certain can lead to their division. Our family law attorney at Kay Polk, Attorney at Law can provide the clarity and guidance you need to safeguard your inheritance and other separate assets. By shielding these resources from the divorce process, you can ensure a more equitable outcome to your divorce.
For more information, contact Kay Polk, Attorney at Law and request a consultation.
