Divorce can significantly affect various aspects of your financial life, including any inheritance you’ve received or expect to receive. In Colorado, marital property laws determine how assets are divided, and the distinction between marital and separate property becomes crucial. While an inheritance is generally considered separate property, there are circumstances where it could be subject to division during a divorce.
If you commingle inheritance funds with marital assets or use them to benefit the marital estate, the inheritance may lose its protected status. Additionally, how your inheritance is documented and handled throughout your marriage can significantly influence the outcome of a divorce proceeding.
Taking proactive steps to protect your inheritance is key. Understanding your rights under Colorado law and consulting a divorce lawyer can help you navigate this complex issue.
Marital vs. Separate Property in Colorado
Colorado is an equitable distribution state, meaning the court divides marital property in a way that it deems fair, not necessarily equal. Marital property includes assets acquired during the marriage, while separate property typically includes items owned before the marriage or received individually as a gift or inheritance.
However, the classification of property isn’t always clear-cut. If you deposit inheritance funds into a joint bank account or use them to purchase marital property, the court may determine that your inheritance has been commingled and is now part of the marital estate. Keeping separate property truly separate is essential to ensuring it remains protected in the event of a divorce.
Additionally, any income generated by the inheritance—such as rental income from inherited property—could be considered marital property if it benefits both spouses during the marriage. Clear documentation and careful management are critical to maintaining the separate status of inherited assets.
Ways to Protect Your Inheritance
If you wish to safeguard your inheritance from potential disputes during a divorce, it’s important to take proactive measures. Below are key strategies to consider:
- Use a prenuptial or postnuptial agreement: These legal agreements can specifically outline how inheritances and other assets will be treated in the event of a divorce.
- Keep inherited assets in separate accounts: Avoid depositing inherited money into joint accounts or using it for shared expenses.
- Maintain detailed documentation: Keep records of when and how you received the inheritance, including any associated financial documents.
- Avoid using inheritance for marital purchases: If you use inheritance funds to buy shared property, it could be classified as marital property.
- Seek Legal Advice Early: Consulting a family law attorney as soon as you receive an inheritance can help you establish the best course of action to protect it.
By taking these steps, you can minimize the risk of your inheritance being viewed as marital property. While it may require careful planning and strict boundaries, safeguarding your inheritance can save significant time and stress later on.
What Happens to Future Inheritances?
Future inheritances are generally not included in property division because they are speculative at the time of the divorce. However, once received, they are treated as separate property unless commingled with marital assets. If you expect to receive an inheritance during or shortly after your divorce, you should disclose this information to your attorney.
Although future inheritances may not be directly at risk, a judge may still consider the potential financial impact of an anticipated inheritance when determining other aspects of a divorce settlement, such as spousal support or property division. Transparency with the court and careful management of any eventual inheritance will be crucial in protecting it.
Contact Us for Legal Assistance
Navigating the complexities of divorce and inheritance laws in Colorado can be challenging, but you don’t have to face it alone.
Our experienced family law team at Clawson & Clawson, LLP understands the nuances of protecting your assets, including inheritances, during a divorce. Whether you need advice on maintaining the separate status of your property, drafting a prenuptial agreement, or managing financial disclosures, we’re here to provide personalized guidance tailored to your unique situation.
We at Clawson & Clawson, LLP are committed to offering clear communication and strategic support every step of the way. Protect your inheritance and secure your financial future with expert legal assistance.
Contact us today to schedule a consultation and take the first step toward peace of mind.