Intergenerational transfers of wealth are a way for family members to leave both a legacy and a means of caring for their loved ones when they die. If you are fortunate enough to inherit assets of substantial value from your loved ones, those assets may become very precious to you. 

In the event of a divorce, you probably want to ensure that you can retain ownership of the inheritance your loved one intended for you to receive. However, most of your marital assets are subject to division in a divorce in Texas. Understanding how the courts will most likely handle your inheritance in divorce proceedings can help you strategize to protect them more effectively.

Unlike most other assets, the date of acquisition doesn’t matter most

With most assets that a couple split up in a divorce, one of the primary factors in how the courts approach that asset will be when the couple acquired the asset or when they acquired the funds used to purchase that asset. The date of an acquisition usually dictates whether it is separate property or marital property. 

An inheritance, on the other hand, is a special asset that will typically remain the separate property of the spouse named in the last will of the deceased. In other words, barring some mistakes in handling finances or the asset itself, individuals can typically protect an inherited asset, whether it is real estate or a financial account, from division in a Texas divorce.

Beware commingling your inherited assets with marital assets

In order to assert that an asset is your separate property, you need to treat it as such during your marriage. While you may want to share some of your inherited wealth with your spouse, you can do so without endangering your right to retain that asset as your separate property. 

Depositing a financial inheritance into a shared account could result in commingling and a claim by your spouse to partial ownership. Maintaining those funds in a separate account but occasionally using them to buy something nice for your spouse protects your right to retain that inheritance in the event of a divorce. 

Certain inherited assets, such as real estate, can prove more difficult to protect from commingling. Speaking with an attorney about your inheritance and the financial circumstances of your marriage can help you make better choices about protecting your inheritance in a divorce.