The Importance of Keeping Gifts and Inheritances Separate From Joint Assets
When you and your partner decide to separate or divorce, the assets you accumulated throughout your marriage form your net family property and are be subject to equalization, with a few notable exceptions. However, assets deemed gifts or inheritances may be excluded from net family property so they are not divided. For this reason, appropriately protecting gifts or inheritances you received during your marriage can be extremely important. We spoke with family law lawyer Negin Sari from Gelman & Associates for more information about keeping gifts and inheritances separate from joint assets.
Avoid Contributing Gifted or Inherited Money Towards a Matrimonial Home
It is important to be conscientious about the use of gifted or inherited money when it comes to a matrimonial home. Gifted or inherited funds can become part of your net family property if they are used for the purchase or maintenance of a matrimonial home. This means the money will become a joint asset and no longer be exempt from equalization upon separation or divorce.
If you wish to contribute gifted or inherited funds towards a matrimonial home but would like to protect them from equalization in the future, you may draft a domestic contract or marriage contract that stipulates so. Similar to a prenuptial or postnuptial agreement, your marriage contract may state that any gifts or inheritance you contribute towards the matrimonial home will be returned in full upon the dissolution of your marriage. For assistance creating a marriage contract that protects your gifts and inheritances, contact our family law lawyers at Gelman & Associates today.
Keep Your Gifts or Inheritances in a Separate Account or Asset
Under the Family Law Act, gifts and inheritances are technically excluded from equalization so long as they are kept completely separate from your spouse. If you have received a monetary gift or inheritance, it should be kept in an independent bank account throughout your marriage. You may also invest gifted or inherited money into other assets, like real estate, so long as each asset is held completely in your own name.
If gifts or inheritances are kept in joint accounts or assets where your spouse is also named, they may become a part of your net family property and may be subject to equalization when you separate. If you have questions about maintaining separate assets or identifying joint ones, schedule a consultation with our family law lawyers at Gelman & Associates today.
Keep a Record of Your Gifts & Inheritances and How You Received Them
For gifts and inheritances to be excluded from your net family property, their existence must be verifiable and traceable. You may want to keep a record of any wills or official documents which stipulate that the funds or assets you’ve received are indeed gifts or inheritances. In the case of a separation or divorce, these records may help ensure that your assets remain exempt from equalization.
In addition, gifts and inheritances must still be in existence at your date of separation in order to be returned to you. Maintaining detailed documentation of when you received the gifts or inheritances, in what manner you received them, and their value over the course of your marriage may aid in their security once you separate.
Schedule a Consultation For Legal Help On Your Divorce or Separation
Your separation or divorce can be made less stressful when you understand which assets you are entitled to keep. Our family law lawyers at Gelman & Associates can provide professional legal advice about how to classify and protect your gifts and inheritances upon the dissolution of your marriage. For legal assistance on negotiating equalization during your separation, schedule a consultation with us today.
Disclaimer: For specific legal advice on your family law matter, please consult with a family law lawyer. The content in this article is not intended to act as legal advice and is instead intended to act as a general overview of a legal topic.
