Can My Ex-Spouse Sue for a Share of My Inheritance After 30 Years of Marriage?

Unraveling a life together isn’t easy. Ending a decades-long marriage can be emotional, including grief. Separating assets and property after decades is often challenging.

In general, property acquired during a marriage is marital, or joint, property in New York. One exception is anything inherited. The standard rule is that bequests, inheritances, and other gifts are the sole property of the spouse who inherited them.

The difficulty arises in situations when it’s unclear whether the inherited property remained a separate asset. Funds mixed with marital property or conduct that indicates shared use of property may transfer all or some of separate property into marital property.

Ending a marriage can be emotional and stressful. Property divisions can be acrimonious, often becoming a battle between former spouses.

An alternative approach is possible. Divorce doesn’t have to be a civil war. Our team focuses on guiding our clients through mediation and collaboration. We encourage you to schedule a conversation with us to learn about how to navigate divorce and property division through non-adversarial options.

What’s the Difference Between Separate Property and Marital Property in a Divorce?

How property is classified determines whether a spouse can keep the property or if it will be divided during a divorce. For marriages and divorces, New York classifies property as marital property or separate property:

• Marital property is generally any property acquired during the marriage.
• Separate property is any property one spouse had before a marriage.

Property acquired during the marriage may also be classified as separate if the spouses entered into an agreement, such as a pre- or postnuptial agreement, that certain property would be classified as separate property. Absent that agreement, once a couple is married, most property is considered marital, or joint, property.

A quick note about word use: Property is a broad term that covers a range of items, everything from jewelry to real estate. Some examples of property: real property (such as the marital home), cash, savings, retirement accounts, stock and mutual funds, personal property (such as cars), and even degrees acquired during the marriage.

When a couple decides to divorce, marital property will be divided. Separate property remains each spouse’s sole property.

Is Inheritance Considered Separate Property in NY, and Does That Change After Decades of Marriage?

Any inheritance, also referred to as a bequest, is defined as separate property in New York. This is the case even if one spouse receives an inheritance during the marriage.

The length of the marriage is irrelevant to whether an inheritance is marital or separate property. Inheritances remain separate property with one exception: If an inheritance is commingled, it can become marital property.

What is Commingling, and How Does It Turn Separate Property into Marital Property Over Time?

Commingling refers to mixing assets. Here, it specifically refers to mixing separate property with marital property. One common example is a home purchase. One spouse had a savings account with $50,000 before marriage. This savings account was only in that spouse’s name and was considered their separate property.

When the couple decided to purchase a home, however, the spouse used the entire $50,000 toward the down payment. The couple had joint ownership of the property, with both of their names on the deed.  This transferred that separate property into marital property. When the couple decides to divorce, that $50,000 is now part of the property division.

One exception would be if the couple had entered into an agreement that, in the case of divorce, the spouse with the bank account would be awarded an additional $50,000. A document that establishes that the money was intended as a loan, not a gift, may also keep that $50,000 as separate property.

Commingling is more than simply having an asset for a long period of time. New York doesn’t have a time limit at which point inherited property transforms into marital property. Some type of action is needed for an inheritance to potentially become marital property.

Often, however, couples aren’t thinking about divorce when they purchase a house. A home purchase, after all, is a sign of commitment, and couples are often more focused on building a life together than thinking about separating.

What Kind of Documentation Matters if Someone Wants to Protect an Inheritance from Being Divided?

Documents that establish that inherited property or other separate property remains a separate asset are key. A postnuptial agreement that specifically mentions the inherited property and that it remains separate can potentially keep an inheritance from being divided.

In New York, the spouse who claims property is separate has the burden of proving that it is, in fact, separate property. This can be done through bank statements, property records, or other evidence that establishes the property, although acquired during marriage, was inherited and should be considered separate property.

Our team works with our clients to assemble evidence about inherited property. This includes situations when inherited property has been commingled with marital property.

What is Transmutation? Does it Also Convert Separate Property into Marital Property?

Transmutation is similar to commingling of assets, as far as converting separate property into marital property. For legal purposes, the two concepts have key differences, but for divorcing spouses, the outcome is the same: Previously separate property has become marital property.

When a couple treats separate property as marital property, they may convert, knowingly or inadvertently, that property into a shared asset. For example, Spouse A inherited a rental property as an investment during the marriage. The property was only in Spouse A’s name.

The rental property is a small apartment building in need of repairs and updates. Spouse B, being the handier of the two, not only maintains the property but also makes several improvements that increase the rental property’s income.

When the couple decides to divorce, a question becomes: Is the rental property a joint asset? The property isn’t jointly titled, but Spouse A is seeing significantly higher rental income as a result of Spouse B’s work.

One potential outcome of this situation is dividing the property ownership from the rental income. While the rental property remains a separate asset, that increase in rental income may be considered marital property.

This example highlights one of the challenges of divorce. Couples, especially couples who have been together for decades, have built a life together. They supported each other and often weren’t thinking about how their commitment to supporting each other and building a life together would make an eventual divorce and the division of assets more challenging.

Why Should Former Spouses Opt for Mediation in a Divorce?

Ten years into marriage, a couple sees a significant improvement in their standard of living when one spouse inherits a significant sum of money from a grandparent. The inherited asset remains the separate property of one spouse, but both spouses and their children benefit from the passive income derived from the inheritance.

The inheritance income was never the property of the other spouse. When the couple divorces, however, that spouse faces a significant change in their standard of living without access to that inheritance.

As the inheritance is separate property, it doesn’t count toward the division of marital property. Documents establish that the interest income also remains a separate asset.

On the flip side, one spouse used the majority of their inheritance to pay for a renovation on the couple’s jointly owned primary residence. When the couple divorces and agrees to sell the house, that spouse feels they should get a larger share of the sale, reflecting their use of their inheritance.

As an added complication, while that spouse provided the financial means to make the renovation possible, the other spouse completed much of the work. That work, in turn, saved the couple thousands of dollars by not having to hire workers.

These examples don’t have an easy answer. That’s one of the challenges with marriage, but it’s also why mediation is a better approach for ending a marriage and dividing assets.

In a traditional divorce, property divisions are governed by strict rules. The couple may have to pay for expensive forensic tracing litigation. Evidence and documentation are key.

Mediation is a more holistic approach. Both sides recognize that documentation may be imperfect or that a property division is more nuanced than the often black-and-white rules that have traditionally governed divorce.

In our experience, mediation can help reduce some of the stress and anger surrounding divorce. Often less expensive, mediation allows former spouses to have more control over the outcome and can account for the complexity of dividing a shared life.

This can be especially true with inherited property. Maintaining inherited property as separate property may not have been a consideration, and couples shouldn’t be punished for living their life without constantly thinking about what their actions may mean for a future divorce.

Mediation encourages conversations, with a neutral third party keeping the discussions on topic. This option allows couples to find a solution that best aligns with their situation and their family.

Schedule a Conversation

Our team provides a collaborative, non-adversarial approach to divorce. We advocate for our clients with a focus on mediation. We understand that ending a marriage is stressful. Our goal is to provide our clients with compassionate advice and counsel as they prepare for the next chapter of their lives.

We encourage you to access our resources to learn more about how to Divorce with Dignity. When you’re ready, reach out to our team through our website or by phone. We’ll schedule a conversation with you to discuss your situation, your goals, and how we can help you navigate this transition.