Can Your Spouse Take Your Inheritance in a Divorce in Tennessee?

In general, the law considers inheritance to be separate property, and the other spouse has no claim to it; however, there are caveats to this rule

Tennessee is an equitable distribution state, meaning that, in the context of divorce, the courts strive to make things equitable between partners. While courts may start out at a fifty-fifty perspective because it is an equitable distribution state, they are also able to adjust this in order to make things fair and take other factors into account.

Regardless, the general rule when it comes to inheritance is that it is property that was intended for the person intended to inherit it to keep and is therefore considered separate property that is not divisible between spouses, regardless of whether it was inherited before or after marriage. Still, there are some important considerations to keep in mind, as we discuss below:

Marital Versus Separate Property in Tennessee

Tennessee, like other states, distinguishes between marital and separate property: Marital property encompasses those assets that are acquired during the marriage (until the divorce is final), while separate property can include the following:

• Anything that someone acquired in exchange for property acquired before marriage
• All property that was received by someone as a gift, bequest, devise, descent, or inheritance (left only to them)
• Any awards related to personal injury lawsuits (damages collected in connection with future lost wages and medical expenses, pain and suffering, and/or victim compensation) and/or in connection with being a crime victim
• Any personal and real property owned by the individual before marriage (including retirement assets)
• Property acquired in exchange for property acquired before the marriage
• Income from and appreciation of property owned before marriage (unless classified as marital property)
• Property acquired after a legal separation order

However, it is also important to keep in mind that, in deciding on equitable distribution, the courts can take into account whether someone is inheriting property in deciding what exactly is fair.

Commingling

Circumstances become more complicated if inherited funds get intermingled with marital funds and/or when the spouse who did not inherit the funds or property uses their own funds to somehow benefit or grow the inherited property, such as when those funds are used to upgrade a piece of property or put into investments which then grow in value. It is also critical to keep in mind that if you and your spouse commingled marital property and separate property together, that inheritance will frequently no longer be considered separate property; for example, if you and your spouse placed the inheritance in your checking or savings account and then deposited funds from both sources of income into that same account. It is also critical to work with a good family law attorney if your spouse can possibly use their own income to grow or improve your inherited property, for example, whether that inheritance was invested or used to purchase property.

This is also why working with an attorney to craft a pre- or postnuptial agreement spelling out what belongs to whom is always a wise decision. As long as the provisions are legal, the courts will uphold what is dictated in the prenup, even if funds were commingled.

Let Us Help: Contact Tennessee Family Law Attorney David L. Scott

With more than 25 years of experience helping people who are going through divorce and other family law issues here in Tennessee, we are committed to ensuring the best outcome for you. Contact us today for a free consultation to find out more.