Understanding the Laws: When Does an Inheritance Become Marital Property in a CT Divorce?
Updated November 26, 2023
Inheritance can be a delicate matter, often bringing both joy and confusion to those involved. This can become even more the case when one spouse is contemplating divorce. In Connecticut, it is vital to understand the laws surrounding inheritances and their classification as marital property during divorce. While it may seem straightforward, the line between personal and marital assets is complex in Connecticut. This leads to potential disputes during divorce proceedings. This is because Connecticut is one of the few “all property” states. What that means is that CT divorce courts may divide all assets — even inheritances — between the spouses.
Today we’ll shed light on when Connecticut courts tend to view inheritances as marital property in Connecticut. We will explore the state’s all property and equitable distribution laws, the role of commingling, and the importance of proper documentation. By gaining a clear understanding of these legal principles, you can increase the likelihood that your inheritance will remain separate from your marital assets. Join us as we navigate the intricacies of Connecticut’s inheritance laws and empower you to make informed decisions regarding your financial future.
Understanding CT Marital Property Law
Marital property is typically defined as assets acquired during the marriage. Alternatively, separate property refers to assets acquired before the wedding or through inheritance or gift. Many states have a bright line between marital property and separate property. In other words, in those states, courts do divide marital property between the spouses and don’t divide separate property. This is not how Connecticut works. In Connecticut property division, there’s no clear-cut distinction between separate and marital property.
Connecticut is an “all property” state when it comes to divorce proceedings. This means that all assets, including inheritances, are subject to division between spouses. Our state follows the principle of equitable distribution. In other words, Connecticut divides property fairly, but not necessarily equally, between the parties involved.
Download: The Connecticut Comprehensive Guide to Property Division
Read: What Is Separate Property vs. Marital Property in a Connecticut Divorce?
How CT Divorce Courts Determine When an Inheritance Becomes Marital Property in a Connecticut Divorce
The next question is, what do CT divorce courts view as “fair” when deciding whether to divide an inheritance between the parties? And, even if the judge decides to divide an inheritance — how do they decide how much to assign to each spouse?
Connecticut courts consider several factors to determine whether to consider an inheritance marital property. One of the key factors that CT courts look at when deciding what’s “fair” is how a piece of property — in this case, an inheritance — was acquired. They also tend to assess the benefactor’s intentions behind the inheritance and the degree to which the recipient integrated it into the marital estate.
Read: Divorcing and Dividing: What Happens to Your Vacation Home?
Receipt of Inheritance
First, CT judges often examine whether only one spouse or both spoouses jointly recieved the inheritance. If the benefactor left the inheritance to only one spouse, Connecticut is more likely to classify it as separate property. However, if both spouses received the inheritance, such as a joint bank account or jointly titled real estate, CT courts are more likely first to treat it as marital property and second to divide it more closely to equally. The court also may consider the timing of the inheritance’s receipt.
Benefactor’s Intentions
Another factor that can influence a court’s classification of an inheritance is its purpose. If the benefactor intended the inheritance to benefit both spouses or the family as a whole, judges may view it as marital property. Conversely, if the benefactor clearly intended the inheritance to solely benefit one spouse, courts are more likely to consider it separate property. The court may look at any explicit instructions or documentation accompanying the inheritance to determine its intended purpose.
It is important to note that even if the Connecticut court considers an inheritance separate property, it still may take its value into account when determining alimony or child support. Connecticut courts have the discretion to consider the financial circumstances of each spouse when deciding about alimony or child support.
Commingling
Connecticut courts also consider the extent to which the recipient comingled the inheritance with marital assets. Commingling occurs when a spouse mixes an inheritance with marital assets, making it difficult to distinguish between the two. If the inheritance has been commingled, courts may treated it as marital property. For example, if a spouse deposited inherited funds into a joint bank account and used it for joint expenses, judges may view the inheritance as commingled with marital assets.
Read: Inheritance & Divorce: Tips for a Smooth Process and Avoiding Disputes
Exceptions to the Rule: Separate Property, Prenuptial Agreements, & Postnuptial Agreements
While Connecticut is an “all property” state, there are exceptions to when an inheritance becomes marital property.
One exception is if the inheritance is clearly defined as separate property through a prenuptial agreement. A prenuptial agreement is a legal contract entered into before marriage that outlines the division of assets in the event of a divorce. If the prenuptial agreement explicitly states that an inheritance is to remain separate property, and follows Connecticut’s legal requirements for a prenup, the court will likely honor that agreement.
A second, related, exception is when there’s a postnup. A postnuptial agreement is a legal contract that spouses enter into after marriage that can outline property division in the event of a divorce. Although enforcement of postnups is less straightforward than prenups, it’s still an option to consider with an experienced family law attorney. So, for example, say Chris and Sarah married in 2000. In 2010, Sarah received her Aunt’s Fairfield County home from her Aunt’s estate. Chris and Sarah were still happily married in 2010. However, they decided to enter into a postnup to clarify that the home would remain with Sarah in the event they decided to divorce down the road.
Note that it’s common for prenups and postnups to require that spouses not commingle separate property. If they do, it could become marital property subject to division. For example, keeping an inheritance in a separate bank account or investing in assets solely in the name of the inheriting spouse prevents it from being commingled.
Read: What Is a Prenup?
Case Studies and Examples of Inheritance Becoming Marital Property
To better understand how Connecticut courts might approach the classification of inheritances as marital property, let’s explore a few case studies and examples.
Case Study 1: At the time Don inherited a significant sum of money from his late father, Don and Betty had been married for five years. Instead of keeping the inheritance separate, Dob deposited the funds into a joint bank account that he and Betty both used for their living expenses. During their divorce proceedings three years later, the court may consider the inheritance as marital property due to the commingling of funds.
Case Study 2: Sam inherited a family vacation home in New London County from Sam’s grandparents before marrying Mark. Sam and Mark used the vacation home for family gatherings and vacations throughout their marriage. In this case, the court may view the inheritance as marital property since Sam used it for the benefit of both spouses and their family as a whole.
These case studies highlight the importance of properly managing and documenting inheritances if you’re trying to reduce the likelihood that a Ct divorce court will classify them as marital property. By keeping inheritances separate and clearly documenting their intended purpose, individuals can increase the likelihood that their inheritances will be considered separate property during divorce proceedings.
Steps to Protect Your Inheritance in Connecticut
If you want to protect your inheritance from becoming marital property in Connecticut, there are several steps you can take:
- Keep your inheritance separate: It is crucial to keep your inheritance separate from marital assets. This can be done by opening a separate bank account solely in your name or investing the inheritance in assets solely in your name.
- Document the intended purpose: Clearly document the intended purpose of the inheritance. If it is intended solely for your benefit, keep any instructions or documentation supporting this intention.
- Avoid commingling: Do not mix your inheritance with marital assets. Avoid depositing inherited funds into joint accounts or using them for joint expenses.
- Consult with an attorney: Seek legal advice from an attorney who practices complex family law. They can provide guidance on how to protect your inheritance and navigate the complexities of Connecticut’s marital property laws.
Taking these steps increases the likelihood that your inheritance will remain separate from your marital assets and courts will treat it as separate property during Connecticut divorce proceedings.
Seeking Legal Advice: Hiring a Connecticut Divorce Attorney for Inheritance and Marital Property Issues
Navigating the complexities of Connecticut’s inheritance and marital property laws can be challenging. Hiring an experienced attorney focusing on divorce and inheritance laws is crucial to help protect your interests.
An attorney can help you understand the specific laws and factors that apply to your situation. They can guide you through the process of documenting and protecting your inheritance, as well as provide representation during divorce proceedings.
When hiring an attorney, look for someone with expertise in family law, divorce, and inheritance matters. They should thoroughly understand Connecticut’s marital property laws and have experience in high net-worth divorce.
Remember, seeking legal advice early on can help you make informed decisions and protect your financial future.
Debunking Common Myths about Inheritance and Marital Property in Connecticut
There are several common myths surrounding inheritance and marital property in Connecticut. Let’s debunk some of these myths to gain a clearer understanding of the reality:
Inheritance & Divorce Myth 1
Connecticut always considered inheritances separate property.
Reality: In Connecticut, inheritances can be classified as marital property depending on various factors, such as timing, purpose, and commingling.
Inheritance & Divorce Myth 2
Once a spouse receives an inheritance, Connecticut automatically protects it from division during divorce.
Reality: Courts can generally consider inheritances when determining the division of marital property or other financial obligations.
Inheritance & Divorce Myth 3
A prenuptial agreement is not necessary if you want to protect your inheritance.
Reality: A prenuptial agreement can provide an extra layer of protection by clearly defining an inheritance as separate property.
Inheritance & Divorce Myth 4
It is not necessary to document the intended purpose of an inheritance.
Reality: Documentation of the intended purpose can help establish the separation of an inheritance from marital assets.
Understanding both these myths and the reality can help you make informed decisions about your inheritance in Connecticut.
Next Steps
In conclusion, understanding the laws surrounding inheritances and marital property in Connecticut is crucial, especially for individuals going through a divorce. Connecticut is an “all property” state, meaning that all assets, including inheritances, may be subject to division during divorce proceedings.
Factors such as timing, purpose, and commingling play a significant role in determining whether an inheritance becomes marital property. It is key to keep inheritances separate, clearly document their intended purpose, and avoid commingling with marital assets.
We highly recommend consulting with an attorney who focuses on high net-worth divorce. They can help you navigate the complexities of Connecticut’s marital property laws and maximize the protection of your interests.
By gaining a clear understanding of Connecticut’s inheritance laws and taking appropriate steps to protect your inheritance, you can increase the likelihood that it will remain separate from your marital assets and secure your financial future.
To discuss working with the team of knowledgeable family lawyers at Freed Marcroft, please reach out.
