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What happens to gifts and inheritances in a divorce?

| Aug 18, 2020 | Divorce

One concern for people who are going through a divorce might be how to protect any inheritances or gifts they may have in a divorce. Like most states, North Carolina is an equitable division state, meaning that marital property is supposed to be divided fairly. This does not necessarily mean it will be divided 50/50.

Determining separate and marital property

The first step in property division is to determine what constitutes separate and marital property. In general, separate property includes:

  • Property owned by a person before the marriage
  • Property specifically mentioned as separate in pre- or postnuptial agreements
  • Payments received in a personal injury lawsuit
  • Inheritances and gifts left to one spouse

Complications involving gifts and inheritances

While it seems as though determining whether something is an inheritance or a gift is fairly straightforward, this is not always the case. If a person has received an inheritance or gift but commingled it with the marital finances instead of keeping it separate, it might then be considered marital property. This could be the case if the inheritance or gift is placed in a joint account or if it is used to purchase something for the couple, such as home renovations. With gifts, a further common complication is a dispute over whether it was a gift or a loan.

Emotions may run high in a divorce, which can make the process of property division difficult even if both spouses are determined to remain amicable. Despite this difficulty, people often manage to reach an agreement about the applicable legal issues through negotiation with the help of their respectivee attorneys instead of having to go to court. However, it is important for people to protect themselves financially in a divorce, and if one spouse is uncooperative, litigation may be a better option.