Especially for high-net-worth couples, the issues surrounding inheritance and what can happen to that money through a divorce end up being critical points to tackle. In Ohio, divorce assets are either separate or marital property. How that’s determined depends on the nature of how the inheritance assets are used and when they entered use within the marriage.
How Ohio Courts Determine Marital vs. Separate Property
The courts will typically look at a range of factors, including:
- Whether the inheritance was acquired during the marriage and intended for both or only one spouse
- Whether the inheritance is traceable (sufficient documentation to verify the nature of the asset)
- What happened after the inheritance – was any part used for marital purposes or otherwise gifted to the spouse?
Combining Property Makes Things Tricky
As with most marriages, both spouses tend to combine at least some of their assets for general ease of use through the course of the union. A good example of this is a joint account that a couple uses for a home down payment or other large expenses. In the event of a split, the courts may deem this down payment money marital property unless it can be proven that one spouse’s inheritance money went solely to the down payment.
How to Keep Money Separate
There are a few ways to make a clear delineation between what is property of the couple and what should remain yours:
- A detailed prenuptial agreement can outline the inheritance and specify how the money will remain separated in the event of a divorce.
- Placing the inheritance money in a trust can show that those funds are a separate asset and not subject to equitable division.
- Or, you could simply keep the money in a separate account, legally separated from any marital accounts or ventures, making it easier to prove the difference should a divorce arise.
Suppose one or both spouses have significant inheritances that they’re bringing to a marriage. In that case, it’s important to understand how that money could be split in the event of a divorce or how it could remain separate. With the steps that can be taken pre-marriage to protect this, your first call should be to a qualified divorce law team to understand which steps to take to prepare in advance and what can happen should a split ever be on the horizon. Call Garretson & Holcomb, LLC today at (513) 863-6600 to learn more and schedule a free consultation.