Friday, October 4, 2013

Inheritances and Divorce Property Division: What is Separate Property?



 A party often wishes to retain inheritance funds specifically bequeathed to one spouse. Ohio domestic relations courts allocate inheritance funds by determining whether an inheritance can be regarded as separate property. Commingling of the inheritance does not necessarily destroy its identity, as the long as the inheritance is clearly identifiable and traceable. 

Consider how the Ohio Revised Code characterizes separate property: 

Ohio Rev. Code Ann. § 3105.171(A) provides in part:(3)(a) "Marital property" means, subject to division (A)(3)(b) of this section, all of the following:(i) All real and personal property that currently is owned by either or both of the spouses, including but not limited to, the retirement benefits of the spouses, and that was acquired by either or both of the spouses during the marriage.(6)(a) "Separate property" means all real and personal property and any interest in real or personal property that is found by the court to be any of the following: (i) An inheritance by one spouse by bequest, devise, or descent during the course of the marriage;(b) The commingling of separate property with other property of any type does not destroy the identity of the separate property as separate property, except when the separate property is not traceable.

Example: Parties were divorced after a 36-year marriage. Prior to the divorce, the husband received an inheritance after his mother’s death. During the marriage, the inheritance funds were placed in joint accounts and some of the funds were used to purchase marital property. At trial no effort had been made to determine if the inheritance funds had remained separately identifiable property. The wife correctly contended that at least some of the funds had lost their character as separate property when the funds were placed in joint accounts and used for family purposes.

An appellate court may likely reverse the part of the trial court's judgment that declared the husband's inheritance to be separate property without attempting to trace the amount which was identifiably separate and remand for the trial court to determine if any of the inheritance had remained separate property.

Example: A wife failed to prove that inherited funds were her separate property. The funds lost their status as such, because they were co-mingled into the parties' joint bank accounts, and some of the funds were expended on business expenses, and others on marital expenses. Further, one of separate properties contained improvements, which were paid for with marital funds and separate funds. Said property was presumed to be marital property, and the wife failed to met her burden with testimony and documentation to trace the inheritance funds.
 
The two examples above are provided to illustrate issues regarding whether property will be regarded as marital or separate, and, how separate property must clearly identifiable and traceable.

The above information is not offered as, and does not constitute, legal advice. The information presumes you are not currently represented by an attorney who knows your specific circumstances.

31 comments:

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  2. See:

    http://ohiodivorceguide.blogspot.com/2010/12/legal-separation-or-divorce.html

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  3. See also (Clermont County section):

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