Is an inheritance protected in a New York divorce? Generally, yes. Under New York law, an inheritance received by one spouse is typically considered separate property rather than marital property and is generally not divided in divorce. However, how you handle inherited assets during your marriage can affect that protection.
Is Inherited Money Separate Property in New York?
Under New York Domestic Relations Law § 236(B), property acquired by inheritance is generally separate property, even when the inheritance is received during the marriage.
The problem often arises when inherited assets are commingled with marital property.
For example, inherited money may become more difficult to protect if you:
- Deposit it into a joint bank or investment account;
- Use it to purchase property titled jointly with your spouse;
- Mix inherited funds with marital earnings;
- Use substantial inherited funds toward jointly owned real estate; or
- Cannot document or trace the inheritance back to its original source.
How Do You Protect an Inheritance From Divorce in New York?
If you receive an inheritance before or during your marriage, consider keeping the inherited funds in an account solely in your name and separate from marital income and assets.
Maintain complete records, including estate documents, bank statements, wire transfers, brokerage statements, checks, and documents showing the source and movement of the inherited funds.
For significant inheritances or family wealth, a prenuptial or postnuptial agreement can provide additional protection and clarify how inherited and other separate property will be treated if the marriage ends.
Can My Spouse Get Part of My Inheritance in a New York Divorce?
The answer depends on the facts.
Although an inheritance generally begins as separate property, disputes can arise over commingling, transmutation, tracing, jointly titled assets, appreciation in value, and contributions made during the marriage.
These issues can become particularly important in a high-net-worth New York divorce involving substantial inheritances, trusts, family businesses, investment portfolios, or inherited real estate.
Protect Your Separate Property Before a Divorce Begins
If you are considering divorce and have inherited substantial assets, do not start transferring, retitling, or moving those assets without first obtaining legal advice. What appears to be a simple financial transaction can have significant consequences in an equitable distribution case.
The Meyers Law Group, P.C. represents clients in complex and high-net-worth divorce matters throughout Long Island, Suffolk County, Nassau County, and New York, including cases involving inherited assets, separate property, trusts, businesses, real estate, and complex financial portfolios.
If protecting an inheritance is likely to be an issue in your divorce, speak with an experienced New York divorce attorney before making changes to the assets.
Attorney Advertising. Prior results do not guarantee a similar outcome.