This week on “Lawyer Says,” we’re answering a Marylander who’s amicably divorcing her former spouse of 30+ years, but wonders if an old inheritance from her mother-in-law would be considered part of the “marital property” to be divided during divorce mediation.
The Question: Does my husband’s old inheritance count as marital property during a divorce?
Married for over 30 years, I moved out several months ago, and will be filing for divorce. No great precipitating event, if that matters. No minor children. I know that Maryland is an “equitable distribution” state.
So far, we have been keeping things civil and are mostly on the same page about division of our major assets — ~$3M in 401Ks/IRAs, savings/investments, his pension, our house. We’re both going to retain counsel, but my appointment is a couple weeks away. Neither of us want to blow tens of thousands of dollars on lawyers and have been talking about Mediation, worst case. Maybe we’re delusional.
QUESTION: Approximately 15% of “our” assets came from an inheritance from his mother (in an account that arguably could be directly traced to the inheritance). It sounds to me like my husband is probably legally entitled to this money. So…when it comes to distributing assets, is this money “taken off the top” so to speak? As in, whatever is left after he gets that money is what we divide? Or is his having that money factored into the equation (meaning that I could possibly be awarded additional funds from other sources to make things more equitable)?
The Answer: That inherited property would most likely be considered “separate” from other marital property, and wouldn’t be included in asset division calculations.
Firstly, the good news is that, if you’re already seeing things from your former partner’s perspective, then divorce mediation does not sound delusional! Mediation tends to work best when both parties want to compromise, and you’re already more than halfway there.
You’re also most likely correct, in that those funds are probably not considered marital property and thus aren’t eligible for division as part of the divorce settlement. Maryland law tends to define those sorts of single-party inheritances as strictly “separate” from any of the joint “marital” property that gets divided between the two parties.
And yes, your gut thought is probably correct as well: As separate property, that money would be “taken off the top” and completely removed from the asset calculations…
…or rather, it wouldn’t be included directly.
See, if any of those funds went toward shared marital property — for example, house maintenance — your husband wouldn’t necessarily get those funds back directly.
As far as Maryland law is concerned, any additional investments into marital property (like house maintenance) would be considered “absorbed” into that property’s value. In other words, instead of receiving half of the house’s value PLUS whatever money he poured into a separate property account, your husband would just get half of the house’s value with those additional monies already factored in.
He might also use the funds in that separate property account to “buy you out” of desirable mutually-owned marital assets.
For example, perhaps he wants to keep the family home instead of selling it and splitting the proceeds. He could have the house appraised and then pay you whatever amount the court says you are owed using those separate funds, if he so wished.
Of course, this is just going off of what you’ve put online. Depending on the circumstances, those funds may indeed be considered marital property and thus subject to equal division. However, we can’t say for sure without looking at all the paperwork involved.
Best of luck during your mediation, and we hope you both find your way to bright new beginnings!
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Our general disclaimer: We’re lawyers, but not necessarily your lawyer, and do not represent the individual who asked this question. We’re providing this information for general educational purposes based on the publicly available information provided by the anonymous Internet user. Any number of details may change how this individual’s attorney may pursue this legal situation, differently from how we suppose above. If you have a similar question, then you should consult with a lawyer about your specific situation to get a “real” response!