Are Inheritances Split in Maryland Divorces?

Once someone realizes they are on the road to divorce, they start thinking about their various martial assets and how they will be divided in the divorce. For many divorcing parties, such assets include a martial residence, retirement accounts, cash in bank accounts, and in some cases, an inheritance they received during the marriage.

If you received an inheritance before or during your marriage or if you anticipate one in the near future while your divorce is pending, surely, you’re concerned about those funds and whom by law, they belong to.

Is the inheritance marital property (marital assets are subject to division)? Is your soon-to-be-ex entitled to some or half of the funds? In this article, we explain how inheritances are treated during Maryland divorces. If you have further questions, we invite you to contact us directly to meet with a member of our legal team.

Maryland is an Equitable Distribution State

Before we dive into how an inheritance is treated in a divorce, we want to explain that like the majority of states, Maryland is an “equitable distribution” state. The term “equitable” is a bit of a misnomer because it sounds like the word “equal,” but in reality, equitable refers to being “fair.”

As an equitable distribution state, marital assets are divided in a manner that is “equitable,” which means fair considering the facts of the case and that does not necessarily mean “equal.” In a divorce, a couple’s assets include marital property and separate property, however, only marital property is subject to division. Generally, marital property includes all assets and income earned during the course of a marriage.

On the other hand, separate property includes assets and income acquired before the marriage, and gifts and inheritances received by one spouse alone during the marriage. Inheritances are separate property, but if they are commingled with marital assets then they can lose their separate property status.

Beware of Commingling an Inheritance

Let’s say you received a $50,000 inheritance when your uncle died and you deposited it into a joint bank account, and then used those funds to pay the mortgage and pay off other marital debt, then the inheritance would become marital property because you commingled it.

If you want to keep your inheritance separate so it is not subject to division in a divorce, our advice is to deposit it into a bank account with only your name on it and to avoid using any of the funds to pay down marital debt or improve the marital property. If you want to shield an inheritance from a divorce, we advise against using an inheritance to remodel the marital home because that too could convert the funds into marital property.

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