How do I know if a property that I inherited is a marital asset?
New York, NY divorce attorney, Ken Jewell talks about how you would know if a property you inherited would be considered a marital asset.
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The property that you’ve inherited you always want to make sure remains in your own name. If you have already put your spouse’s name on the deed, or on the title, or on the account, you’re not going to be able to just, by yourself remove that spouse’s name. It’s going to be a gift to the marriage.
The other piece that people oftentimes become concerned with is the income or dividends that spin off of the separate property asset. Let’s say you’ve taken the inheritance, you’ve kept it in your own name and yet the income that’s spinning off of the inheritance you’re depositing in a joint account. The money that you actually physically put in the joint account is marital property. You can’t take it back.
If you’ve been putting money into the marital account all along from separate property and then you suddenly decide to put that money into a separate property account, the money that is directly put into the separate property account, so long as it never touches the marital account, will remain separate property. The money that is put into the marital account will be marital property, with one exception.
If it’s traceable, and it by and large wasn’t used for day to day expenses – let’s say we’re looking at a down payment on a house. You buy a house for 1.5 million dollars and you’re going to take 500 thousand dollars out of your separate property and put it towards the down payment. In that instance, if you keep it traceable, that money will be recoverable – although not the appreciation on that money – but that money with be recoverable upon a divorce scenario.
If it’s not traceable, it’s presumed that it was a gift to the marriage and that you’re not going to be able to receive a credit for it. If we’re talking about a vacation home that you inherited and it remains titled to you as an individual but yet over the past 10 or 15 years it’s become used by the marriage and with the family, the property will remain separate property up to the point that it had been used by the family on some kind of regular basis and thus was deemed a gift to the family and a gift to the marriage.
The value of the vacation home up to the point where it became used by the family on a regular basis is your separate property. If, however, once you start looking at the property being used as a family vacation home, then it’s arguably marital.
The reason for that is, is that your spouse may very well be deemed to have cared for the home and looked after it and done the things that an ordinary homeowner would have done and therefore they are entitled to a piece of the appreciation. Generally half unless there are certain factors that could be taken into consideration that may alter that.