The division of assets in a divorce is often one of the most contentious parts of the process. Indiana is not a community property state, but there are still some specific elements to think about when it comes to protecting certain assets, such as an inheritance.
Protect your inheritance from becoming marital property with specific steps.
Include it in a prenuptial agreement
If you received the inheritance prior to your marriage, a prenuptial agreement is key to protecting that asset from being marital property. Draft a prenuptial agreement defining individual assets versus marital assets and detailing expectations in the event of divorce.
Keep it out of your joint accounts
Any inheritance that you receive, whether before or after your marriage, belongs in a separate account from your joint banking accounts. Keeping the funds separate helps define them as your personal asset, not marital property.
Avoid using funds for joint improvements
If the marital home needs repairs or your spouse is looking at a new car, you may feel tempted to use your inheritance to cover those costs. You should not do this. Avoid using any of that money for joint benefit because that makes it easier to designate the remaining funds as joint property for equitable division in the divorce.
The rules for protecting individual property, such as an inheritance, are specific. Make sure you understand how to keep your inheritance separate from your marital finances, protected with a prenuptial agreement and used specifically for personal purposes instead of for joint benefit.