How Will Divorce Affect My Inheritance?

Almost all of the property acquired by both spouses during the marriage will be subject to division by the court in a divorce. However, some property (called “separate property”) is excluded from this division. Generally speaking, separate property is property which was:

1. Acquired before the marriage
2. Acquired by gift or inheritance
3. Acquired during the marriage but with separate property funds. 

Because Texas has a community property presumption, we automatically assume all property acquired by spouses during their marriage is community property and thus subject to being divided between the spouses by the Court. The spouse who is claiming certain property is their separate property has the burden to prove it is their separate property by clear and convincing evidence. 

A spouse’s inheritance is usually characterized as that spouse’s separate property and awarded to that spouse. However, some actions, such as “commingling,” can call into question the characterization of the inheritance. Commingling occurs when separate property is mixed with community property. For example, if your inheritance was acquired before your marriage but you later transferred the proceeds into a joint account with your spouse and then you and/or your spouse deposited income into that account, then your separate property inheritance funds will have mixed with community property funds. Commingling makes it much harder for a spouse to prove that part of the account is their separate property because the funds have mixed. Commingling creates questions such as the following: When money was spent out of the account that had both separate property and community property funds, which funds went out first? Are the funds that remain in the account separate property or community property funds?

Whether you are currently considering a divorce or you are concerned about protecting your inheritance in the event of a future divorce, call Kirker | Davis LLP to speak with an experienced attorney today.