Can Divorce Affect Inherited Property?

One of the most complex and important issues in any divorce is the division of property. While some divorcing spouses are able to come to an agreement on this issue outside of court, in many cases a judge must step in and direct an equitable distribution of assets.

However, determining which assets may be distributed is often a source of confusion, and laws vary state-by-state. In Massachusetts, it is important to remember that all property – even property inherited by one of the spouses – is subject to distribution during divorce.

“In a nutshell, everything is ‘in the marital pot’ for distribution upon divorce,” write Patricia O’Connell and Donald Tye in an article published by the Massachusetts Bar Association. However, they also note that “the treatment of gifted and inherited assets upon divorce is highly case-specific.”

Among the factors that will help a court determine whether or not to distribute inherited assets to the non-inheriting spouse are the length of the marriage (the longer the spouses were married, the more likely the assets will be distributed) and whether or not the assets are “woven into the fabric” of the marriage – that is, whether or not the assets have been a large factor in the ongoing living arrangements of the married couple.

Also important are any future plans that may have been made regarding the use of the asset. For example, O’Connell and Tye note that”[i]f the divorcing spouses (particularly in a long-term marriage) had planned on using a gifted/inherited asset (whether principal or income) to finance retirement, then the ‘non-gifted’ spouse who relied on that asset is more likely to share in the distribution of the asset.”

O’Connell and Tye note that, because this is such a complex issue, it is important that you inform your divorce attorney about any inherited assets and the manner in which those assets have been used during your marriage. Your attorney will then be better equipped to work on your behalf to ensure that the final distribution of the property is fair and equitable.