Divorcing couples in Arkansas must either make arrangements to divide their property or go to court and ask a judge to apply the state’s equitable distribution statute to their marital estate. The first step in the property division process is to identify marital assets. Spouses make thorough disclosures to one another regarding their assets and debts.
Most of the time, any property acquired during the marriage or with marital income belongs to both spouses, regardless of whose name is actually on the ownership paperwork. There are legal exceptions for certain resources that people might receive during marriage but which could remain their separate property when they divorce.
An inheritance is one of the few types of property that can remain separate property when spouses divorce. However, it is still possible for the inheritance to end up included in a marital estate and subject to equitable distribution rules in some cases.
When is an inheritance vulnerable?
Generally speaking, inheritances are separate property, as are gifts received from third parties and property owned prior to the marriage. The spouse claiming an inheritance as their separate property typically needs to provide financial records showing how they acquired the property and that they maintained it as separate from the marital estate during the marriage.
If the other spouse can show that commingling occurred, then the inheritance may be at risk of division during the divorce proceedings. Commingling can take on many forms when discussing an inheritance.
Depositing a financial inheritance into a joint account is an act of commingling. So is adding a spouse to the ownership paperwork for any inherited assets, such as vehicles and real estate. Additionally, there can be questions about commingling in cases where one spouse used marital income to maintain their inherited assets or accepted unpaid labor from their spouse for that purpose.
Those hoping to protect an inheritance during an Arkansas divorce often need to conduct a thorough financial review with the help of an attorney. Preparing in advance for likely property division complications can help Arkansas spouses protect themselves. An inheritance can generally remain separate property so long as spouses did not commingle assets and have the financial records to prove their claims.