Is Investing Your Inheritance In Your Home Wise?

When a marriage ends, a couple's assets that were accumulated during the marriage, are generally divided equally and split between the couple. There are a few exceptions which include gifts or inheritance which were received from a third person during the marriage. However, if the inheritance is invested in the couple's matrimonial home, it ceases to be an exception (or it becomes an exception to the exception) and it will also be divided equally.

Clearly being able to trace the gift or inheritance is important. If the money is invested alongside other funds some of which are spent prior to separation, it will be difficult (if not impossible) to argue that only monies accumulated as a couple, and not the inheritance funds, were spent.

The Lesson: Consider how to invest any gifts or inheritance before making the investment. If the inheritor wants to retain the benefit of the inheritance should the marriage end, she or he should not invest it in the family home including using it to pay down the mortgage. Similarly, if the funds will be invested for future use, such as retirement, it is wiser to retain a separate investment account to avoid any confusion caused by comingling funds.

The content and the opinions expressed here is informational purposes only and does not constitute legal or professional advice. Nor does reading or commenting on it create a lawyer/client relationship with the author. I encourage you to contact me directly at adrianlawoffice@gmail.com if you have specific legal questions or concerns.

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