January is Divorce Month

Your parents leave you $500,000 as an inheritance. Six months later, you file for divorce from your spouse. What you decided to do with that $500,000 could be very important in determining if your ex has a claim or not.

Keeping It Apart

The key is to keep it separate so that you can show that the money was yours alone the entire time. Your spouse was never allowed to use it, never had access to it, and can't ask for $250,000 in the divorce. The best way to do this is to open a new bank account when you get the inheritance, an account that is just in your name, and put all of the money into that account.

Joint Spending

You may be tempted to spend the money on joint assets. For instance, maybe your spouse's car broke down. You pulled $40,000 out of the account and the two of you bought a new vehicle together. If so, your spouse could then claim that he or she was allowed to use the money, opening it up so that you have to split what is remaining during the property division process.

Extra Additions

It's also a risk, in some cases, to add more money to the account. For example, perhaps you started putting one of your two monthly paychecks into the account with the inheritance, figuring it was a good way to save for the future. That could give your spouse grounds to claim that the account now contains marital assets. That's money that your family earned while you were married. Since the inheritance was commingled with the paychecks, you may have to divide the entire account.

Know Your Rights

As you can see, it's important to be careful and really consider every move you make with your money. Be sure you know the legal ramifications and your rights if you get divorced.