Steps To Protect Your Inheritance And Gifts Received From Third Parties

Did you know that, if handled correctly, your inheritance and individual gifts from third parties are non-marital property?

Many people received inheritances and gifts from their families during their marriage. In Maryland, property received prior to marriage, by a gift from a third party or inheritance, or directly traceable to such sources is your non-marital property – meaning you keep it and it will not be divided with your spouse in divorce. 

Similarly, in DC, property received prior to marriage, by a gift or inheritance, or property in exchange therefor is your separate property – meaning you keep it and it will not be divided with your spouse in divorce.

The problem that many face is that they co-mingle, or mix, their non-marital or separate funds with marital funds. For example:

• They deposit non-marital/separate funds into an account with marital money, or
• In reverse they deposit marital funds into the account holding the gift or inheritance, their spouse deposits money into the account holding the gift or inheritance, they “loan” money to the marriage and pay themselves back with marital funds into the account holding the gift or inheritance, or even title the gift or inheritance in joint name.

If you have property prior to marriage, or receive property by gift or inheritance during the marriage, keep it separate!

If it’s investible assets, I suggest depositing and investing them at a new banking institution where you do not keep any other monies, and whatever you do, do not add to it.  Also, maintain all paperwork showing where the money came from along with monthly or annual statements from the date of your marriage onward in a safe place.

When in doubt, consult a divorce attorney.