In Minnesota, all assets that are accumulated during the marriage are considered marital property that would be subject to division in the event of a divorce. There are certain types of assets that can be considered non-marital property, which could include an inheritance received during your marriage. Property that is classified as non-marital is typically excluded from the property division in the event of a divorce, meaning your spouse would not be entitled to a portion of your inheritance. However, there are some important nuances that you should be aware of when it comes to how your inheritance may be treated.
First, if you are the spouse making a claim that an inheritance is non-marital, then it will be your responsibility to prove the asset is non-marital. This typically starts with providing proof of where the asset came from. Examples of this could include: a deed for real estate from an estate, a check from a probate proceeding, or paperwork for collecting an inherited IRA.
Second, you have to prove that the inheritance was not commingled (or mixed in) with marital assets. This can be a much more difficult task depending on the type of asset that was inherited and the length of time that has passed since you received the inheritance. For example, if you received an inherited IRA that you have not cashed out or made any contributions to, then you may be able to successfully prove you have kept the asset separate and it continues to be non-marital property. On the other hand, if you received cash and deposited that into a joint bank account where your income is deposited or funds are used to pay marital debts or expenses, then those funds would likely be considered commingled and you would lose the non-marital characterization of the inheritance. Keeping inherited property separate and avoiding commingling with marital assets is key to protecting it during a dissolution.
Some types of inherited assets could be considered partially non-marital and partially marital. A common example would be real estate. If you inherited a home that you and your spouse lived in as your marital home and you used marital assets to maintain the home (e.g., paid a mortgage, made repairs, completed renovations, etc.), it might complicate matters. A portion of the home may continue to be considered non-marital, but increases in the value of real estate that are attributed to marital assets or marital effort could create a marital interest as well, which would be subject to division in the event of a divorce.
One final nuance to be aware of – it is the court’s job to ensure a fair and equitable division of assets in a divorce, which does not mean an equal division of assets. In unique situations, the court could invade a spouse’s non-marital assets to ensure the other spouse will not be left with nothing or to account for a large disparity in assets awarded to each party. Think of this as the exception, however, and not the rule. Factors including the length of marriage, health of the parties, income of the parties, etc. would also be considered by the court before invading non-marital assets.
If you have concerns about protecting your inheritance, it’s important to consult with a family law attorney to ensure that the asset is properly documented and remains separate. The experienced attorneys at Rochford Langins Jarstad LLC are here to help. Contact our office to set up a consultation – 507-534-3119.