During a Florida divorce, an inheritance is treated as a non-marital asset, which means it’s considered separate property. Under Florida’s laws regarding the equitable division of assets, an inheritance is not subject to asset division between spouses during a divorce. The determination of what is considered marital property and non-marital property is performed by a judge. Inherited assets are non-marital, however, various factors, such as commingling and gifting, can cause these assets to be regarded as marital property.
Is Inheritance Considered Marital Property in Florida?
No, inheritance is not considered marital property according to Florida law. It is typically considered separate property and belongs solely to the person who received it.
It is important to understand that any inheritance funds received during pre- or postnuptial can remain separate property.
Note that in a community property state, there is an even property division during a divorce. In an equitable distribution state like Florida, such assets are subject to even distribution.
Marital Vs Nonmarital Property
Marital property vs. nonmarital property refers to the legal category of assets in a marriage’s context.
Comprehending the difference between marital and nonmarital assets is vital during divorce proceedings.
Clients may wish to consult a divorce lawyer or attorney from a family law firm. An attorney will provide advice on how to keep the inheritance separate.
Marital Property
Marital property generally encompasses assets acquired during the marriage. This can include income and other possessions obtained jointly or individually while married, like a family home and joint bank accounts.
A few specific cases, like commingling an inherited asset with a marital investment, can confuse inheritance. This is when inheritance can become marital.
Nonmarital Property
Nonmarital property includes assets acquired before marriage. It can be a noninterspousal gift or inheritance received.
It also includes items designated as nonmarital through a postnuptial agreement or prenuptial agreement. The crucial point is that inheritance is classified as separate or nonmarital property in Florida.
This means that if one spouse inherits assets, these are excluded from the pool of investments.
In this case, if a significant amount of money and property acquired by a spouse is nonmarital, then the court will look for other assets up for property division during a divorce to be fair to the other side.
Who Determines the Status of an Inheritance in a Divorce Proceeding?
The determination of the status of an inheritance in a divorce proceeding is a responsibility entrusted to the court — specifically, the presiding judge overseeing the divorce case.
The court evaluates the classification of inheritance received by considering its nature, acquisition, and potential commingling with inheritance and marital assets.
When Factors Might Cause An Inheritance Be Considered a Marital Asset?
Even though a significant inheritance is considered separate property, some exceptions can cause it to be categorized as marital.
Several things can make inheritance become marital property, making it subject to equitable property division laws in the State of Florida. The list below contains the circumstances in which an inheritance may be considered marital property.
- Commingling of funds
- Gifts or transfers
- Duration of the marriage
Below is a more in-depth discussion of a few situations where inheritance can become marital property.
Commingling of Marital and Nonmarital Funds
Commingling blurs the line between separate and marital property. It is the commingling of investments, where separate property merges with joint property.
For instance, commingling can involve the combination or use of inherited funds in a joint bank account alongside other marital assets. This makes it difficult to separate one person’s inheritance from the original marital property.
Another example is when the other spouse’s inheritance (typically nonmarital, even when acquired during the marriage) is used to contribute to the downpayment of a jointly titled house or make mortgage payments on the family home.
Either situation can make the inherited property become marital property and be subject to equitable distribution.
Inherited money can also be used to purchase investments in both spouses’ names or deposited into a joint account to cover joint expenses.
To prevent commingling, a spouse who inherits funds can deposit the inheritance into a separate account solely held by them. Maintain separate accounts and have documentation to help identify them as different from marital assets.
Gift or Transfer to Spouse
It’s important to know how gifts or transfers are treated under family law in the context of divorce.
A gift or transfer is when a spouse gives the other spouse money, assets, or property during matrimony. Doing this will make inheritance become marital property.
In Florida divorces, gifts between spouses are often considered marital property. A gifted or transferred inheritance may be subject to equitable property division during the divorce.
This can be prevented by stipulating clearly in prenuptial or postnuptial agreements that inheritance (in the form of money or other physical assets from a deceased family member) that one spouse gave to the other be returned in the case of divorce.
Duration of the Marriage
The duration refers to the time a couple has been legally married. In divorce and inheritance, the duration can play a role in determining how assets are classified and divided.
In Florida, the duration of the marriage is one factor the court considers when determining the assets subject to equitable distribution.
A longer duration of the marriage may lead the court to view the couple’s financial lives as more intertwined. It influences how certain assets, including inheritance, are treated.
For example, suppose one spouse receives an inherited property early in the marriage and keeps it as a separate property for their five years of married life. The court may be more inclined to classify it as nonmarital property.
However, if a couple has been married for as long as 30 years with incomplete documentation, it’s possible for inheritance to be classified as marital funds.