Your parents gave you an inheritance, and it is a substantial amount of money. When you first received it, you thought that you and your spouse might be able to retire on it one day.
However, your spouse has now filed for divorce. Your question is whether or not you have to split the inheritance with them during property division. They claim that they should receive half of it, while you believe it should stay with you because it was given directly to you by your parents. What happens to it?
Separate assets and marital assets
Typically, what happens with an inheritance that is given directly to one person is that it starts as a separate asset. If your spouse was not included in the gift — such as if you received a check in just your name — then it is a financial asset that you own independently.
On the other hand, if it was given to both of you, then it may be a marital asset. This is also true if you mix the inheritance with other marital funds, commingling it and turning it into a marital asset. Doing so means that it has to go through property division.
For instance, if you put the balance of the inheritance check in your shared bank account or shared investment account, then both you and your spouse own it, and you have to divide it. But if you kept the money separate in an account that you set up specifically for that purpose, in only your name, then you retain 100% ownership.
As you can imagine, this is a common area for disputes during property division. Make sure that you know exactly what legal steps to take.