Inheritance Disputes in Your Illinois Divorce 

 Posted on May 23, 2022 in Divorce

Property division during divorce proceedings can be contentious and complex. Illinois law recognizes inherited assets as non-marital property. However, identifying the initial inherited asset can be difficult once an inheritance inadvertently or purposely is mixed with marital property. Commingling and transmutation can make property classification and division much more complicated during divorce. 

Two Ways Non-Marital Inheritance Becomes Marital Property

Illinois law states that inheritance is non-marital property. The spouse who received the inheritance is the sole owner of the inheritance assets. However, inheritance can become marital property through commingling and transmutation.

• Commingling – Mixing inherited assets with marital property is considered commingling. If a spouse can prove the commingling of assets was intended for temporary convenience and can still identify the inherited asset, the inheritance may remain non-marital. However, if the inherited property is no longer identifiable, it may be considered marital property. For instance, if a spouse deposits inherited money into a joint spousal account, this commingling converts the inheritance to marital property.
• Transmutation – This occurs when there is a deliberate intent to use the inheritance as marital property. Transmutation also always changes the commingled property’s status to marital once the asset is no longer identifiable. If an inherited house becomes the family home, the inheritance has changed from non-marital property to marital. Shared upgrades to the inherited home will further solidify the inheritance as marital property and will likely be divided equitably between the spouses during divorce. Another example of transmutation is including a spouse on the deed of an inherited family business.

Three Ways to Protect Inheritance

Spouses who want to protect their inheritance should take the necessary steps to ensure inheritance assets remain non-marital. There are several ways to do this, including”

Segregate the inheritance – Keep monetary inheritance in a separate bank account. Do not add a spouse’s name to the title for inherited physical assets. Refrain from purchasing joint property or paying off joint debts with inherited money. 

Prenuptial agreement – This marital agreement enables each spouse to stipulate that any future inherited property remains non-marital. A modification can update the agreement if the prenuptial agreement does not specify inheritance matters. Marital agreements are typically included in the divorce decree, which expedites the proceedings.

Postnuptial agreement – In the absence of a prenuptial agreement, a postnuptial agreement is a beneficial alternative to specify the handling of an inheritance. A postnuptial agreement can also designate who is to inherit the inheritance in the event of death.

Contact a DuPage County Divorce and Inheritance Attorney

At Pesce Law Group P.C., we are a full-service family law firm proficient in inheritance matters.  Our divorce lawyers will aggressively advocate for the protection and preservation of your inheritance.  If the inheritance is marital, we will fight for what is due to you.  We are patient and reliable inheritance law attorneys, and we value our clients and are sensitive to their needs. Contact a Naperville divorce attorney for a free consultation at 630-352-2240.

Sources:

https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm

https://www.forbes.com/sites/christinefletcher/2022/02/08/protecting-your-inheritance-from-your-spouse/?sh=afc63af64b92