The gift of an inheritance often provides an earnest task for the beneficiary. A loved one has passed away, and now you want to make sure that you handle the money or property with care. An inheritance can provide you with the nest egg to pursue your goals in life. You want to ensure that you are able to reach your goals while protecting the intent of the person from whom you received the inheritance.
However, life changes as we grow older and the legal obligations we face throughout it can modify the strategies you could use to protect your investment. At its most basic level, an inheritance is a gift to the beneficiary and is not subject to equitable distribution in a divorce, but what you do with the money or property after the initial gifting can change your entitlement to its sum.
Here are three strategies to protecting your inheritance through marriage and divorce:
1. Sign a prenuptial agreement
A prenuptial agreement is a contract signed before marriage that outlines ownership of property. Couples are often hesitant to write a prenuptial agreement because it appears to presuppose the feelings of love involved in a relationship. However, a prenup is a pragmatic way to protect your future interests in an inheritance even under the best circumstances.
2. Save documents
If your inheritance was specifically intended for your use, you can provide documentation to prove it. A copy of your tax return or the will is often sufficient evidence enough to prove your ownership. Documents can be kept in a safe deposit box or with your attorney for security.
3. Keep separate accounts and paperwork
The best way to protect money for its intended use is to hold it in a separate account. Long terms savings, an investment account or a trust fund can ensure the safe keeping of your inheritance. If you put the money into an account with your spouse’s name on it too, then it could become mutual property.
If the inheritance is something more tangible like real estate or a vehicle, maintaining one name on the title of property can clarify ownership.
Simple strategies can secure significant assets
Pragmatic foresight in the handling of your inheritance can help protect its original intent. An experienced family law attorney can offer a personalized approach to ensuring the security of your long-term assets and goals.