When facing divorce, understanding how inheritances are treated can significantly impact financial outcomes. Tennessee operates under the principle of equitable distribution, which means courts strive for fairness in dividing marital assets, but not necessarily an equal split. Typically, inheritances received individually are classified as separate property, meaning they are generally protected from division, provided they are handled correctly during the marriage.
Separate and marital property
Under Tennessee law, an inheritance received either before or during marriage is typically considered separate property. Such property belongs exclusively to the spouse who received it, shielding it from automatic distribution in a divorce. This status can remain secure provided the inheritance is not commingled with marital funds or assets.
Maintaining the separate status of an inheritance involves clear and deliberate actions. Keeping inheritance funds in individual accounts, separate from any joint marital accounts is essential. Moreover, these funds should not be utilized for household expenses or marital property investments. Adhering to these precautions significantly strengthens your claim to maintain inheritance as separate property.
Consequences of commingling assets
If inherited money or property becomes commingled, meaning mixed or integrated, with marital assets, the inheritance may lose its protected status. Examples include depositing inherited funds into joint bank accounts or using them for marital expenses like mortgage payments. Tennessee courts might interpret such actions as evidence of intent to treat the inheritance as marital property, potentially subjecting it to division.
Accurate documentation plays a critical role in safeguarding inheritance as separate property. Maintaining detailed financial records, clearly tracing the origin, handling and use of inherited assets, supports your claim in court. Proper documentation underscores that the inheritance remained separate throughout the marriage.
Protecting your financial interests
In Tennessee, inheritances are designed to remain the separate property of the recipient, barring commingling or intentional blending with marital assets. Vigilant management, careful financial practices and thorough record-keeping are essential strategies to ensure inheritances retain their intended separate status during a divorce. Being proactive and deliberate about handling your inheritance can effectively protect your assets in the event of divorce in Tennessee.