Q: If your wife gets money from the sale of her moms house, is the husband entitled to the money? Or is it just the wifes?
A: Inherited property (which includes cash) is the separate property of the heir/beneficiary.
A:
The answer to your question only really matters from a legal standpoint when you divorce. How the parties manage their money during marriage is entirely up to them. A spouse has no legal right to access their spouse’s inherited funds or to take gifts given only to them, if their spouse refuses.
When a spouse receives an inheritance or a gift from someone, it is not deemed marital property for purposes of divorce. It is deemed the separate non-marital property of that spouse.
However, if the inherited money is commingled with other marital funds (like depositing it into an account that also has funds deposited into it that were earned during the marriage), then it may become marital property that way.
Other ways to convert non-marital funds into marital property include using the inherited funds to make improvements to the marital home, which then converts the funds so used into joint marital property; or buying a home with the inherited funds and then using money earned during the marriage to pay the mortgage, taxes, insurance, maintenance and repairs. In these latter scenarios, in the event of divorce, the spouse who used their non-marital assets to acquire marital property can still argue that they contributed the largest share and ask the court to equitably divide that property to award a larger share to them.
Maryland is an equitable division state when it comes to divorces, not a strictly 50-50 state. But there are 10 listed factors to consider under the statute, and who earned or contributed the most in money is only one factor that can be outweighed by other factors. But equitable division only applies to “marital” property, not to non-marital property.
If a spouse wants to fully protect their inherited or other non-marital property (e.g., property they owned before the marriage) from being included in the definition of marital property at the time of divorce, then they should deposit any inherited cash into an account titled solely in their name, and save all records showing the source of funds and all statement balances since the account was set up showing no marital funds were ever deposited into that account—thereby insulating the account from claims that marital funds were later commingled with the inherited funds. Ditto for property owned prior to marriage. In the case of existing financial accounts that a spouse continues to make deposits to after the date of marriage, statements showing account balances in the month of marriage and thereafter should be scrupulously maintained, to allow tracing of funds.
If the spouse wants to withdraw part of the money from their inherited funds to use on marital expenses, that is fine, but anything they use the withdrawn money on will then become commingled marital property. If they use that money simply to buy themselves a new car titled solely in their name, then that car is also non-marital; however, beware that later using marital funds to pay for title, registration, insurance and repairs may give the other spouse a basis to argue the car has become marital property, at least to some extent. And again, saving records to prove the car’s purchase and other expenses only came from the inherited funds will be necessary to defeat a claim that marital funds were used to buy and maintain it.
In a divorce, the burden of proof to establish that certain property is non-marital is on the spouse making that claim.
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