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How is Inherited Property Handled in a Virginia Divorce?

Trying to decide how to divide property during a divorce proceeding can be complicated for several reasons. For example, suppose a few years into the marriage, you personally inherited a vacation home from a family member who passed away. Now, you may be wondering whether the property you inherited would be subject to property division during the divorce. 


The good news is that inherited property can be considered “separate property in Virginia.” Separate property is defined as any property that either spouse owned before entering into the marriage as well as gifts or inheritances that either spouse acquired while in the marriage. Only marital or hybrid property can be divided by a divorce court. Therefore, separate property, including potentially an inheritance you received during the marriage, is not subject to property division. 


How is Inherited Property Handled During a Divorce? 


Because your inherited property is separate property, you should be able to keep it. However, property division could become more difficult to decide if you don’t keep inherited property or money as an isolated asset or the asset was subsequently transferred. 


For example, suppose you receive a large cash inheritance from a family member who passed away and then mix those funds with joint funds to purchase another asset. It may be challenging to determine how that new asset should be divided since not all of it will be considered separate property. This doesn’t mean you can’t recover the inheritance. It simply means the process of doing so will probably be more complicated. 


To ensure you are able to retain your inheritance as separate property, you will simply need to show the court that you obtained the inheritance and can track the inheritance from when you received it to where it is now. 


What if I Used My Inheritance to Pay for an Asset? 


If you used your inheritance to pay for a new asset, then that new asset could also be categorized as separate property. That would prevent the asset from being subject to marital property division. How the new asset is categorized depends entirely upon how it was purchased, when and from what source of funds. If you exclusively used your inheritance to make the purchase, you may be able to retain the asset as separate property. 


What if I Used a Portion of My Inheritance to Pay for an Asset? 


If you used a portion of the inheritance to pay for an asset and paid for the rest of the asset with marital funds, then a portion you purchased with the inheritance could be hybrid or your separate property. The other portion would be marital property and subject to property division. It’s imperative to be able to show receipts in court, testimony from witnesses and other witnesses . You should be prepared to show how much you inherited and how much of that inheritance went towards the new asset. 


What if I Placed My Inheritance in a Bank Account with Funds for Living Costs? 


Some people place their inheritance in a joint account to pay for living costs while married to their partner. If you used your inheritance for living costs, you could lose its classification and therefore won’t be able to treat it as separate property anymore.


However, a court can consider your contribution if you can demonstrate how much you added to joint living expenses through your inheritance. This may work in your favor when the court decides how to divide up the marital property and debts.


Contact a Virginia Divorce Lawyer Today


The Vienna and Tysons, Virginia divorce attorneys at Roop Xanttopoulos Babounakis & Klam PLLC have the knowledge and skills to help you navigate through the divorce process, protect your property rights, and advocate for your interests. Contact us online or at 703-442-0040 for more information about how we can support your case.


Roop Law is an Attorney at Roop Law. You can follow him on Facebook and connect via LinkedIn

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