Is an Inheritance Considered Marital Property in Ohio?

If you’re considering parting ways with your spouse and have received an inheritance or are expecting to receive one, you may be wondering “is an inheritance considered marital property?” While marital property must be divided equitably between spouses under Ohio law, it’s important to understand that an inheritance is usually characterized as separate property and is not subject to division in divorce or dissolution. However, there are some instances in which an inheritance may be commingled with marital assets — and converted into marital property.

How is Property Divided in an Ohio Divorce?

In an Ohio divorce or dissolution, property is classified into two types: marital property and separate property. However, only marital property is divided in divorce, unless something unusual has taken place. Marital property includes all assets earned or acquired by either spouse during the course of the marriage. Separate property consists of any assets owned by either spouse prior to the marriage, as well as gifts or inheritances received by only one of the parties.

Ohio follows the doctrine of “equitable distribution” when it comes to dividing marital property and debt in divorce or dissolution. Although the default position is equal division, if an equal division would be inequitable, that means that marital property and debts  must be divided between the spouses in a way the court deems fair. Spouses are also free to reach their own agreement regarding property division by entering into a settlement, rather than let a judge decide, unless that agreement is so one-sided that it is deemed unfair and unreasonable under the circumstances.

Is an Inheritance Considered Marital Property in Ohio?

Importantly, an inheritance is typically treated as separate property in divorce or dissolution, whether it was received before your wedding or while you were married. In addition, while a court may consider the inheritance of a spouse as a source of income when awarding spousal or child support, the inheritance assets themselves still would not be subject to division. However, depending on the actions you take, there are certain situations where an inheritance — or a portion of it — can be considered marital property.

When Can an Inheritance Turn into Marital Property?

Although the general rule is that an inheritance is not considered marital property, this isn’t always the case. There are a few ways an inheritance may be considered marital property in divorce. In some instances, an inheritance can be converted into marital property regardless of when you received it. For example, if you deposited the inherited money into a joint account or used inheritance funds to make improvements to the marital home, the inheritance (or a portion of it) would no longer be considered separate property unless the disposition of inherited funds can be clearly traced.

An inheritance might also be commingled with marital property if it was used to:

  • Start or grow a family business
  • Pay for household expenses
  • Make joint purchases or investments
  • Purchase a house or other real property and jointly own it with your spouse
  • Make improvements or renovations to the marital home
  • Pay off a joint mortgage

An inheritance may also be considered marital property if it was given to both you and your spouse.

If inherited funds were deposited to a joint account and were used to purchase a vehicle close in time to receipt of funds, and bank records showing the deposit and the expenditure, together with purchase agreements and receipts, demonstrate the purchase of that vehicle was from inherited funds, that vehicle could be deemed successfully traced to separate funds. Therefore, that vehicle would be separate property, and your spouse would not be entitled to any portion of its value in the divorce or dissolution.

Notably, every case is fact-specific and requires a thorough analysis. The spouse who seeks to have property deemed separate property has the burden of proof and must trace the asset to prove the property is indeed separate property. Oral testimony alone will not satisfy the burden — a paper trail must establish how the funds were used and where they were spent. It’s crucial to keep adequate records and documentation to prove that an inheritance should be treated as separate property.

How Can You Protect Your Inheritance During Divorce?

The best way to ensure that your inheritance is protected during divorce or dissolution proceedings is with a valid prenuptial or postnuptial agreement. While a prenuptial agreement is executed prior to the marriage, a postnuptial agreement is entered into during the marriage. These are powerful contracts that can specify what property will be classified as marital property and which assets will be considered separate property. Both types of agreements can determine that inherited assets will remain the property of the inheriting spouse and should not be subject to division even if commingled in the event you terminate your marriage.

Another way to protect your inheritance during divorce or dissolution is to keep the inheritance assets in a separate bank account or investment account, apart from the marital funds and any account where income earned by you or your spouse is deposited. Inherited real estate can be maintained in your own name and not jointly titled. This can help ensure it will remain separate property. You might also consider placing the inheritance money in a trust to keep it separate from marital property.

Contact an Experienced Ohio Divorce Attorney

If you are wondering whether your inheritance is considered marital property, it’s best to consult with an experienced divorce attorney who can best advise you. Located in Green, Ohio – halfway between the Akron (Summit County) and Canton (Stark County) courthouses – Melissa Graham-Hurd & Associates, LLC provides committed counsel to clients for a wide array of matrimonial matters, including those involving inheritances and property division issues. Contact Melissa Graham-Hurd and Associates to schedule a consultation to learn how we can help.