When facing divorce, wealthy individuals confront unique challenges, especially with large personal assets. A divorce becomes “high asset” when combined marital property reaches $1 million or more. This can include investments, real estate and businesses. For many affluent families, this often includes inherited money or property, a special kind of asset that needs careful legal review.
Is your inheritance at risk of property division?
In Massachusetts, inherited money or physical items generally remain “separate property.” This means they belong only to the person who received them and usually does not face property division in a divorce.
However, this rule can change. If one mixes inherited money with shared marital funds, it can become marital property. For example, if a person puts an inheritance into a joint bank account or uses it to improve a shared home, it mixes with marital assets. Massachusetts courts can then divide that once-separate inheritance during a divorce.
How to protect individual wealth
Acting early strongly protects personal wealth. Here are some ways to safeguard assets:
- If a person receives an inheritance, they should keep it entirely separate from all marital money.
- One should open a special bank account only in their name. They should not put any marital income into this account.
- If a person buys assets with inherited money, they should put them only in their name.
For large inheritances or complex family trusts, a carefully written prenuptial or postnuptial agreement provides strong protection. These agreements clearly define what property is separate and stop future arguments about inheritances.
Why legal support is crucial
Navigating inherited wealth in a high-asset divorce can be complicated. With the help of a legal professional, you can protect your inherited assets and ensure your unique financial situation receives the meticulous attention it deserves.