Divorce is a challenging life event that often involves the intricate division of assets acquired during the marriage. When inherited assets are part of the equation, handling the legal aspects of a divorce becomes even more challenging. A stellar Auburn, AL divorce lawyer can provide you with strong legal representation and help you take the right steps for a fair resolution to your divorce and family law matters.

Treatment of Inheritance During a Divorce in Auburn, Alabama

In Alabama, assets acquired before the marriage or received through inheritance are generally considered separate property. Understanding the distinction between separate and marital property is important, as separate property is typically excluded from the equitable distribution process during divorce.

Since inheritances are considered separate property, they are typically not subject to equitable distribution during divorce proceedings. Equitable distribution is the principle that marital property is divided fairly, but not necessarily equally.

Need for Documentation of Inherited Assets During a Divorce

Establishing Separate Property

Alabama recognizes the concept of separate property, which includes assets acquired before the marriage or received through inheritance. Proper documentation is essential to establish the inherited assets as separate property, ensuring they are not subject to division during the divorce.

Preserving the Source of Funds

Documentation helps preserve the source of funds for inherited assets. This is particularly important if the inherited funds were used to acquire additional assets or were commingled with marital funds. Clear records can help distinguish the inherited portion from marital property.

Proving Inheritance Status

The documentation provides evidence that assets were indeed inherited. This may include copies of wills, probate documents, letters of administration, or any legal instruments confirming the inheritance. Such proof is valuable in demonstrating the separate nature of the assets.

Tracking Asset Growth or Changes

Inherited assets may appreciate or undergo changes during the marriage. Proper documentation allows for tracking any growth, investment, or changes in the form of inherited assets, providing a comprehensive view of their financial history.

Avoiding Misunderstandings and Disputes

Clear documentation helps prevent misunderstandings or disputes during divorce proceedings. It minimizes the chances of the other party contesting the nature of the assets, reducing the potential for lengthy legal battles.

Untangling Commingled Inherited Assets in Divorce Proceedings

Commingling occurs when inherited assets are combined with marital assets or used for joint purposes, eroding their separate identity. This can happen through actions such as depositing inheritance funds into a joint bank account or using them to acquire jointly-owned property. Commingling can jeopardize the separate property status of your inherited assets.

If inherited funds are used to start or invest in a business during the marriage, the business may be considered marital property. For instance, utilizing your inheritance to acquire a store in Auburn Industrial Park, especially if the business is subsequently managed by your spouse, can make the equitable distribution of business assets in the event of a divorce challenging.

Courts may consider commingled assets as marital property during divorce proceedings. In such cases, these assets become subject to equitable distribution, where they are divided based on fairness rather than strict ownership. Determining the specific contribution of inherited funds to joint assets or investments may require expert financial analysis.

Other Ways of Keeping Inherited Assets Separate from Marital Assets in Auburn, AL

Individual Accounts: You should maintain individual bank accounts for depositing inherited funds. Avoid joint ownership of these accounts.
Record Keeping: Maintain detailed records of all transactions involving inherited assets. You should also keep copies of wills, probate documents, and any other legal instruments confirming the inheritance. This documentation serves as vital evidence during divorce proceedings.
Individual Purchases: When using inherited funds, make individual purchases rather than joint acquisitions. This helps maintain the separate identity of the inherited assets.
Segregate Investments: If investing inherited funds, consider using a separate investment account held solely in your name. This helps track the performance of these assets separately.
Separate Titling: If inherited funds are used for real estate purchases, consider titling the property in the name of the inheriting spouse. This reinforces the separate ownership of the asset.
Create a Trust: Establishing a trust for inherited assets can provide an added layer of protection. Consult with a divorce lawyer to explore this option.

Can Inheritance Be Used for Calculating Alimony or Spousal Support in an Auburn Divorce?

In Auburn, Alabama, alimony is awarded based on factors such as financial need and the paying spouse’s ability to provide support. Inheritances are not automatically factored into these calculations. If the inheriting spouse voluntarily contributes inherited funds to joint expenses, it might be viewed as a factor during alimony considerations. With that said, this is subject to the court’s discretion.

In addition, the terms of any prenuptial or postnuptial agreements can influence how inheritances are treated during divorce, including whether they impact alimony. Each divorce case is unique, and the impact of inheritances on alimony can depend on various factors, including the length of the marriage, the financial situation of each spouse, and the specific terms set forth by the court.

Get a Reputable Auburn, AL Family Law Attorney on Your Side

The seasoned Auburn divorce lawyers at Haygood, Cleveland, Pierce, Thompson & Short, LLP understand that divorce proceedings are a highly personal and emotional process, and we are committed to providing compassionate and client-centered representation. To request your consultation, call us at (334) 821-3892 or complete this online form.

Inheritance And Divorce: Legal Considerations for Protecting Inherited Assets

Navigating inheritance and divorce? Understand the legal considerations with our Auburn, AL divorce lawyer. Learn how to protect your inherited assets, document them properly, and prevent commingling during divorce proceedings. For expert guidance, contact us at (334) 821-3892.

Service Type: Family Law Attorney