Inheritance and Division of Marital Property

In Separation & Divorce by Sarah Hink

When a married couple separates and divorces in North Carolina, the law calls for the court to divide the couple’s marital property in an “equitable” manner. On the other hand, each partner’s separate property stays with them and is not subject to equitable distribution. This makes the classification of a couple’s property as marital or separate a complex and hard-fought source of litigation when a marriage ends. Essentially, the partner with more money or resources will generally fight to hold on to their money, while the partner with less will seek more.

For some people, inheritance signifies a great source of personal wealth. This is why if a spouse inherited property during a marriage, a natural question becomes: is the inheritance separate or marital property?

Inheritance is Generally Separate Property

The North Carolina legislature defines “Separate property” to include:

“all real and personal property acquired by a spouse before marriage or acquired by a spouse by devise, descent, or gift during the course of the marriage. However, property acquired by gift from the other spouse during the course of the marriage shall be considered separate property only if such an intention is stated in the conveyance. Property acquired in exchange for separate property shall remain separate property regardless of whether the title is in the name of the husband or wife or both and shall not be considered to be marital property unless a contrary intention is expressly stated in the conveyance. The increase in value of separate property and the income derived from separate property shall be considered separate property…”

In other words, even if inheritance is received by one spouse during a marriage, it is deemed separate property so long as the property is specifically left to that spouse.

Despite this definition, the reality of an inheritance is that when a spouse inherits money, he or she begins using that money. For example, if that money is put into a joint account and used by both spouses, or is used to buy property in the other spouse’s name, then the inheritance may be converted into marital property. In effect, inheritance that begins as separate can be converted into marital property.

New Direction Family Law

When you separate and divorce, the equitable distribution of marital property is your legal right. If you or your spouse has received inheritance during your marriage, it is critical to consult with an experienced attorney to help preserve your legal rights. New Direction Family Law is a North Carolina family law firm that proudly serves Wake, Johnston, Lee, Harnett, Cumberland, Nash, Granville, Franklin, and Durham counties. If you want smart, knowledgeable, and effective legal representation, call us. Contact our office at (919) 719-3470 to schedule an appointment or reach us online at our website.

Sarah J. Hink
New Direction Family Law

New Direction Family Law
(919) 719-3470