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Inheritance, Divorce, And Property Division

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Kantrowitz, Goldhamer, Graifman, Perlmutter & Carballo, P.C.

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Written/Reviewed By:

Barry S. Kantrowitz, Esq.

Last Updated: Sep 30, 2025

Read Time: 3 mins

Below, our friends from Vayman & Teitelbaum, P.C. discuss inheritance, divorce, and property division.

What’s Truly Separate Property?

Divorce can stir up a whirlwind of emotions and a host of complex legal questions. One of the most common concerns couples face is what happens to property and assets when they separate, especially when one spouse has received an inheritance. Is inherited money automatically considered separate property in a divorce? And what happens if those funds are mixed with joint assets?

Understanding how inherited assets are treated under family law can help you make informed decisions and protect what’s rightfully yours.

What Is Separate Property?

In general, property falls into two main categories during a divorce: marital (or community) property and separate property. Marital property includes income and assets acquired by either spouse during the marriage, while individual property includes assets acquired before the marriage or received individually through a gift or inheritance.

This means that, yes, inheritance is typically considered separate property. If your aunt left you a house or your grandfather left you a lump sum of money, and it was designated solely for you, that inheritance begins as your separate asset.

But there’s a catch.

When Inheritance Becomes Marital Property

Even though an inheritance begins as separate property, it can lose that protection through a process called “commingling.” If the inherited asset is mixed with joint marital funds or used in a way that benefits the marriage, it may no longer be considered separate.

Here are a few common examples of how this happens:
Depositing inherited money into a joint bank account
Using inheritance funds to make improvements on a jointly owned home
Using inheritance to pay for shared debts or family expenses

Once these funds are mixed or used for marital purposes, it becomes challenging, if not impossible, to distinguish what’s yours from what belongs to both spouses. In the eyes of the court, that commingled asset might now be considered marital property and subject to division.

Protecting Your Inheritance

To keep an inheritance as separate property, it’s crucial to take the proper legal and financial steps:

Keep inherited money in a separate account in your name only
Avoid using inherited funds to pay for marital expenses
Document everything. Keep records showing the source and how the funds have been used or invested.
Consider a prenuptial or postnuptial agreement that outlines explicitly how inheritance will be handled in the event of a divorce.

Taking these precautions may not be romantic, but they are practical. They ensure that your inheritance is treated with the legal clarity it deserves.

What About Property Purchased With Inheritance?

Let’s say you use inherited money to buy a car, a house, or make a significant investment. Is that property still separate?

It depends.

If the purchase was made in your name alone and the funds can be traced back to the inheritance, it may still be considered separate. However, suppose the property is titled jointly or has been used by both spouses. In that case, it may be regarded as marital, especially if the non-inheriting spouse contributed to its maintenance or increase in value.

Family Law Attorney

Navigating the fine line between separate and marital property can become complicated quickly. If you’re facing a divorce and concerned about protecting your inheritance, don’t guess. Talk to an experienced family lawyer who can help you understand your rights, gather documentation, and advocate for what is legally yours.

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 8 days ago
 
 
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   Kenny Perlow 
 29 days ago
 
 
 Trustindex verifies that the original source of the review is Google. KGG Law, and Barry Kantrowitz in particular, set the bar high for what a thorough, practical, strategic, compassionate and smart lawyer can be. Everything about Barry's advice and representation was exemplary and the stress mitigation that resulted was invaluable. On top of that, the ultimate result Barry achieved was beyond what was reasonable to expect and we are forever grateful. Often, people say that you hire a lawyer to prevent a problem. Sometimes, unfortunately, you need an attorney to solve a problem and I could not recommend Barry and his firm any more highly in that regard.
  
 
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 93 days ago
 
 
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 96 days ago
 
 
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   Mike Sakmann 
 102 days ago
 
 
 Trustindex verifies that the original source of the review is Google. I sought legal advice regarding an employment matter and had an excellent experience working with Sam Smith, Esq. at KGG Law. Sam was thorough, attentive, and took the time to listen carefully to my concerns before providing clear, thoughtful guidance. I appreciated the professionalism and care shown throughout the process, and I would confidently recommend KGG Law to anyone in need of legal assistance.
  
 
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   Liz Hecker 
 108 days ago
 
 
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 131 days ago
 
 
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 144 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Kate Carballo is a dedicated, passionate, and creative attorney whom I had the pleasure to lecture with at a state trial lawyer's conference. Kate's lecture demonstrated how she uses her innovative and "out-of-the-box thinking" to achieve outstanding results for her injured clients. That Kate is certified by the Supreme Court of New Jersey as a civil trial attorney is a testament to her skills, experience and commitment to excellence.
  
 
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 151 days ago
 
 
 Trustindex verifies that the original source of the review is Google. Was referred to KGG law by a friend and could not have asked for better legal representation. They walked me through every step of the process after my accident and began every call with “ how are you feeling” which was just one example of how much they care about their clients. They handled my case very efficiently, professionally and courteously. My attorney Kate Carballo was a rock star! So clearly experienced, she consistently made me feel at ease with the process. Highly recommend
  
 
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   Vinnie Kung 
 154 days ago
 
 
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