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How to protect an inheritance during property division

When most Texas couples are preparing to wed, the last thing on their minds is planning for the potential end of their marriage. However, failing to put adequate protection in place can be a disaster if one's union is among those that ultimately fail. This is especially true for individuals who are planning on receiving a sizeable inheritance in the future and do not want to lose that gift during property division.

If a husband or wife inherits assets in their sole name after they are married, those assets are considered to be separate property and are not subject to division in the event of a divorce. The problem lies in how those assets are treated. If inherited wealth is not kept completely separate from marital wealth, the courts will consider those assets to be commingled.

For example, if a wife inherits $200,000 from an aunt and deposits those funds into a separate investment account, they will remain safe from loss during a divorce. As soon as any of that money is withdrawn and used for joint efforts, such as home repairs or funding a vacation, they become commingled. The same is true if the husband eventually contributes money to the investment account.

The best way to protect against loss of an inheritance during property division is to draft a solid prenuptial agreement. That document can clearly state that any inheritance received by either party will remain the sole property of that party in the event of a divorce. This approach, combined with efforts to keep those assets separate from marital wealth, can effectively shield a Texas inheritance against loss.

Source: cheatsheet.com, "Marriage: 5 Signs You Need a Prenuptial Agreement", Megan Elliott, March 28, 2016

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