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Inheritance - separate or co-mingled
Old 09-17-2019, 08:51 PM   #1
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Inheritance - separate or co-mingled

Those who've been left large inheritances...have you invested in your own name or co-mingled assets with your spouse?

What has the result been for you?
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Old 09-17-2019, 09:05 PM   #2
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Old 09-17-2019, 10:26 PM   #3
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there is no my money or her money...just our money. that applies to our working income, retirement income, investment income and the small amount we've inherited. some of what we own may not be jointly owned like our 457's IRAs both trad. and roth but everything has gone into one large pot and we are each other's primary beneficiary. we each take a small, budgeted, monthly "allowance" to spend as we like. we celebrate 50-yrs of marriage next march, 52-yrs if you count high school.
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Old 09-18-2019, 05:26 AM   #4
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Originally Posted by OddGuy View Post
Those who've been left large inheritances...have you invested in your own name or co-mingled assets with your spouse?

What has the result been for you?

Well, neither....I put the taxable account into my trust, but we're both trustees for each others' trusts, and my partner has full access through their Fidelity account. The inherited IRAs are still in the same account in my name alone just to avoid paying taxes on the entire amount, but my partner is the beneficiary, and we consider the RMDs (which is all I take from them) household funds.


If we met after retirement and/or had children separately, that might change things, but that's not the case for us.
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Old 09-18-2019, 05:42 AM   #5
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No inheritance but if either of us had one, taxable assets would go in a joint account and IRAs would go in an inherited IRA with the RMDs going to joint. As the Avenger pointed out, I would take a different approach with inheritances or assets if DW died and I remarried.
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Old 09-18-2019, 05:48 AM   #6
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In most states inheritances are protected differently than marital assets, in cases of divorce. However, should you choose to keep such a assets separate because of that, you might find your likelihood of testing that law is somewhat increased...

(ETA: I think even if you co-mingle it, the original inheritance would still have the same protection, but it would be a trickier paper trail. I'm not sure if "growth" accrued on an inheritance is also protected, co-mingled or not, so this might be something you want to some really detailed research if you're leaning one way or the other for any reason, either to protect your inheritance, or to object to your partner's keeping separate).
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Old 09-18-2019, 05:48 AM   #7
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DW received a small inheritance and just went into her taxable account but we don't keep separate track of it. My inheritance will likely be substantial but I doubt that we'll keep separate track of it.
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Old 09-18-2019, 06:03 AM   #8
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Does anyone know how Medicaid treats an inheritance kept separate? I did a Search and it appears they might not consider it as assets of the non-inheriting spouse when the latter needs LTC- but when I researched it many of the answers ended with "consult an attorney".

My Aunt inherited a large sum from her parents after they both died, maybe in the 1970s. It went into the joint accounts- that's just what you did back then. Over the years, they used some of it to support the kids and grandkids- house down payment, private school for the grandkids, etc. but there was still a reasonable amount left when Uncle was diagnosed with Alzheimer's. Aunt took care of him at home till he was unmanageable and ended up spending down close to the max she could keep before Medicaid picked up Uncle's LTC costs. He died before Medicaid kicked in.

If Medicaid doesn't look at inheritances that weren't commingled and a couple may need Medicaid for LTC it might be a good reason to keep an inheritance separate.
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Old 09-18-2019, 06:05 AM   #9
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I’ve been married and had children from only one person so I would say no (haven’t received an inheritance yet). However, DW has sister who is married to man with children from previous marriage and sister has no children of her own. She also doesn’t consider his children to be her children because the were grown before they got married. So, she plans on leaving anything from an inheritance from her parents to our children, her parents children. Basically a follow the blood line concept. That is of course assuming she doesn’t need it to live.
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Old 09-18-2019, 06:43 AM   #10
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Comingled immediately. I thought about keeping it separate since I didn't "earn it". For now it is invested where we can track it separately, but it is owned jointly with DW.


It is our deep reserve fund, we fully intend to pass all of it on to our two children in our trusts, or through some gifting at appropriate times if needed.
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Old 09-18-2019, 06:52 AM   #11
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All our money is commingled regardless of where it comes from.
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Old 09-18-2019, 06:55 AM   #12
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When I received inheritance from my parents I considered titling it as my separate property . However after some thought, I decided to toss it our joint account because somebody who had been willing to put up w/ me for so long was surely past the vesting period.
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Old 09-18-2019, 07:28 AM   #13
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I think it depends on the situation. DW and I were both widowed, and we each have two sons from previous marriages.
Our accounts are separate. We have no joint accounts. All our investments have a TOD for each of ours sons.
Fortunately, we each have enough income and assets individually that it is not a problem.
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Old 09-18-2019, 07:31 AM   #14
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15+ years ago we inherited a combined $250-300K. No idea which account(s) any of it is in today.
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Old 09-18-2019, 08:11 AM   #15
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Quote:
Originally Posted by Aerides View Post
In most states inheritances are protected differently than marital assets, in cases of divorce. However, should you choose to keep such a assets separate because of that, you might find your likelihood of testing that law is somewhat increased...

(ETA: I think even if you co-mingle it, the original inheritance would still have the same protection, but it would be a trickier paper trail. I'm not sure if "growth" accrued on an inheritance is also protected, co-mingled or not, so this might be something you want to some really detailed research if you're leaning one way or the other for any reason, either to protect your inheritance, or to object to your partner's keeping separate).
This is very sticky. If you have any concern whatsoever, I would keep funds in separate account. Co-mingling into a joint account that is used for bills, mortgage, vehicle purchase or home improvement generally turns inheritance in to joint property. Would be a hard fight to endure (I have first hand experience).
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Old 09-18-2019, 08:37 AM   #16
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Unmarried but with the same person for 41 years. Inheritances have blended in to our accounts - as gerntz says. Almost 10 years ago gal's Mom died and she was joint on a checking account and a Honda. Those amounts ($20k~)have been held separately - not her choice, but mine: her mother passed that to her. It just sits like some other inherited items in memory of her Mom.
A year or so ago I was feeling particularly mortal and thinking about inheritance. Gal and I hold almost everything jointly, but when I go I'd like my siblings to get a noticeable chunk - not enough to impact the security of my gal into the foreseeable future, but enough that the tax fairies would get their wings all aflutter. After discussion I moved the amount I'd like sibs to get out of our joint Vanguard account and into an account in my name only, with my siblings TOD for 98% and gal TOD for 2%. This should keep the tax elves at bay and allow for a stepped up basis while not putting my gal in the position of writing a really large gift check out of what would be her account. This has resulted in a little bit of hurt feelings - I've urged that she do the same so if she predeceases me I'm not in the position of feeling I have to write an equal sized check to my gal's sister, but that hasn't happened yet.
Seems like a large inheritance from family might feel like something you want to husband for your own mix of genes (we're childless), no matter how much you love your partner.
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Old 09-18-2019, 08:42 AM   #17
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Married for over 40 years and never even thought about it. Co-mingled well over a million from two inheritances. Might be different if we didn't have trust or if there was some "clear" financial reason(s). I couldn't tell you where the money is today scattered among various accounts.
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Old 09-18-2019, 08:51 AM   #18
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All our money is commingled regardless of where it comes from.
Same in our marriage.

Inheritance is something we never had and is an easy way to riches. I will say going forward with our estate there will be money to be inherited which will be nice to give because it wasn't something we didn't get along the way. I couldn't of imagined getting an inheritance and how I could of made that money work in retirement.
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Old 09-18-2019, 09:16 AM   #19
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Commingled a low six figure inheritance from my father, left 90% to me and 10% left to my husband. The largest part was in a TSP. The smaller part was in life insurance. My husband's 10% of each was small enough that he got his in checks that he promptly endorsed and told me to deposit into our joint accounts. I didn't hesitate to do the same with my funds, although over a period of 5 years for the RMDs.
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Inheritance - separate or co-mingled
Old 09-18-2019, 01:36 PM   #20
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Inheritance - separate or co-mingled

Separate for me. Itís a sizable amount and while I donít see us ever divorcing I wanted to keep it separate.
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