Inheritance - separate or co-mingled

[Gill]

Separate for me. It’s a sizable amount and while I don’t see us ever divorcing I wanted to keep it separate.

Agreed. Many reasons to keep it separate.
Gill

 

[HI Bill]

Separate for me. It’s a sizable amount and while I don’t see us ever divorcing I wanted to keep it separate.

+1. Agreed. I kept a trail of the transfers from the deceased accounts to the present location in a new brokerage account. In my state, generally only the inheritance, and not earnings on the inheritance, is protected during a divorce.

 

[kaneohe]

....................... In my state, generally only the inheritance, and not the stepped up basis (earnings), is protected during a divorce.

Isn't the inheritance >=the stepped up basis?

 

[HI Bill]

Isn't the inheritance >=the stepped up basis?

Sorry, I should have said 'earnings on the inheritance'.

 

[WestUniversity]

Co-mingled

 

[kaneohe]

Sorry, I should have said 'earnings on the inheritance'.

That makes sense........I think the same is true in some community property
states.

 

[chumped]

Married 32 years. A $100,000 inheritance of husband(now ex) was commingled as all our accounts were joint. During divorce, ex husbands attorney wanted the entire amount returned to ex as money is fungible.

I disagreed as many bills were paid from that account, including college tuition.

Inheritance ended up as joint property. So, 50/50.

For my future, separate money and accounts should I remarry.

 

[RetireAge50]

My DW received a fairly large inheritance this year which we just added in to our joint brokerage account like any other money. If she wants to use this for any purpose it is ok with me.

For now, we treat it the same as any gain or loss on our portfolio (we simply adjust our expected spending going forward).

 

[Senator]

Keeping it separate only makes sense. Divorce or death could make the inheritance go to someone that you did not want it to go.

 

[Sunset]

Separate for me. It’s a sizable amount and while I don’t see us ever divorcing I wanted to keep it separate.

Smart choice !!!!

I was in the situation of being married and trusting my spouse like many here have said.
I inherited some property, to me alone, some fairly worthless land, too much trouble to title in both names.

A few years later spouse slept around a lot, decided to divorce me, and asked for EVERYTHING.

I never saw it coming, did nothing bad to deserve it, it was over 5 years of court battles.

Judge told spouse inherited property was off the list right away.

 

[nativenewenglander]

Smart choice !!!!

I was in the situation of being married and trusting my spouse like many here have said.
I inherited some property, to me alone, some fairly worthless land, too much trouble to title in both names.

A few years later spouse slept around a lot, decided to divorce me, and asked for EVERYTHING.

I never saw it coming, did nothing bad to deserve it, it was over 5 years of court battles.

Judge told spouse inherited property was off the list right away.

Separate accounts here. My parents left me a goodly amount, the trust attorney advised putting it in my name only, but using the income from it for both our benefit. So far so good. I see lots of divorces and I had one 20 years ago, when wife #1 ran off with another guy.

 

[Jonesee]

Married 33 years, together 39. We've co-mingled everything since we first moved in together as teens.

 

[The Cosmic Avenger]

Keeping it separate only makes sense. Divorce or death could make the inheritance go to someone that you did not want it to go.

True, but when my DM passed and left me low six figures, we were making much less than we are now, so we maxed out our retirement savings (both 401ks and Roths), and started drawing from the inheritance to cover our budget. And yes, I ordered sushi once a week for a few months, my version of retail therapy. By the time most of that was spent down, we were able to keep contributing at that level on our own, and all that was left was a small Inherited IRA in my name, although I've built it back up to the low six figures. When my DD passed, there were two main accounts, an inherited IRA and a taxable investment account, mid-six figures combined. We spent probably a bit over 10% of that in the few months after he passed, mostly on estate matters and a vacation (as I had been caring for him long-distance for about a year, and I needed it!), and now what remains is also part of our retirement plan, although I have cashed in a bit of the taxable funds a couple of times for "gifts from grandpa" for our kid, as that's what he would have wanted. His Inherited IRA of course is still in my name, and the taxable account is in my trust, as I mentioned earlier. (I realized I hadn't mentioned what we actually did with the accounts, just how we titled them.)

 

[swakyaby]

Currently receiving a substantial inheritance, > $1M, with mutual fund accounts slowly trickling over to my name only. If I chose to name them in joint ownership, the financial institutions required medallion signatures. The inherited IRAs are also in my name, and the RMDs from those are mostly used to pay our joint income taxes. The taxable accounts have a stepped up basis, making it easier to withdraw funds without having much capital gains. I haven’t bothered re-naming any inherited accounts to joint at this point, and probably won’t.

 

[Vacation4us]

Married 32 years. A $100,000 inheritance of husband(now ex) was commingled as all our accounts were joint. During divorce, ex husbands attorney wanted the entire amount returned to ex as money is fungible.

I disagreed as many bills were paid from that account, including college tuition.

Inheritance ended up as joint property. So, 50/50.

For my future, separate money and accounts should I remarry.

Interesting, how you would do it different now, but benefitted from ex’s inheritance.

Human nature I suppose.

 

[chumped]

Interesting, how you would do it different now, but benefitted from ex’s inheritance.



Human nature I suppose.

I suppose the fact I was a SAHM, infidelity was involved, and a real nasty divorce. Plus I cared for his ill mother.


Nope. Second marriage - should their be one - separate finances.

 

[jollystomper]

I am not sure what is considered a "large" inheritance. I have received from my parents estate a sum that is noticeable but did not make a difference (and in fact was not assumed) for my retirement plans. I see it as "our" money. DW however says I have "first right" on how to use it.

DW is *supposed* to receive something from her mother when her mother passes (no assumptions due to insane dysfunction on that side of the family), but DW already says it would be "our" money - but I would give her first rights on how to use any of it.

 

[chumped]

I suppose the fact I was a SAHM, infidelity(him)was involved, and a real nasty divorce. Plus I cared for his ill mother.


Nope. Second marriage - should there one - separate finances.

Correction

 

[ERD50]

Originally Posted by chumped View Post
Married 32 years. A $100,000 inheritance of husband(now ex) was commingled as all our accounts were joint. During divorce, ex husbands attorney wanted the entire amount returned to ex as money is fungible.

I disagreed as many bills were paid from that account, including college tuition.

Inheritance ended up as joint property. So, 50/50.

For my future, separate money and accounts should I remarry.

Interesting, how you would do it different now, but benefitted from ex’s inheritance.

Human nature I suppose.

I don't see it that way.

It sounds like some of the inheritance was spent on things they both agreed to? So now the ex wants it back, after it was spent? That doesn't really make sense.

I suppose if the ex could be entitled to the remainder of the inheritance as his. But the amount that was spent jointly, became joint property. So that's hard to do w/o actually segregating it.

-ERD50

 

[target2019]

Comingled
Except for the inherited IRAs.

 

[HI Bill]

In CA, when my folks divorced, the attorneys considered the original bequest amount to my mom as separate property, even though it was not kept separate. Part of it was used to buy a new range, refrigerator, and washer/dryer years before the divorce.

Dad had to pay the retail (new) price to keep the appliances purchased with mom's inheritance. He should have let her have the appliances, and bought new! But he did get to keep the house, and the Proposition 13 tax valuation, so he actually ended up ahead.

 

[Vacation4us]

Very few divorces are amicable. I understand the SAHM thing, in my opinion it’s a joint decision.

In my divorce ex told me he should get all marital assets because he earned them and some day I would in inherit.

Things change when a marriage ends. No judgment I just thought your perspective interesting.

 

[DrRoy]

Except for IRAs we are co-mingled.

 

[imnontrad]

I kept all gifts I received from my parents separate, not co-mingled. It came in hand too. Since they were never co-mingled, my husband had no claim to the gifts when we divorced.
Also, in my family, the person who gets a gift/inheritance has sole decision on how it gets spend/invested.

 

[meleana]

I co-mingled some of it with my spouse, but the rest I put in my name with a TOD (Transfer On Death) beneficiary naming my spouse.


This reminds me- I need to set up a revocable trust (which I am going to do shortly for a new construction house we are building) with an incapacity clause and put those TOD accounts in it.