Determining whether inheritance is considered marital property in Illinois can be complex, depending on several key factors. While the simple answer might seem straightforward, a deeper dive reveals nuances crucial for understanding Illinois' marital property laws. This guide will clarify the intricacies of inheritance and marital property division in Illinois, answering common questions and providing valuable insights.
What is Marital Property in Illinois?
In Illinois, marital property is defined as all property acquired by either spouse during the marriage, excluding specific exceptions. This includes assets acquired through earnings, investments, or gifts received jointly. Understanding this broad definition is vital before addressing the specifics of inheritance.
Is Inheritance Considered Marital Property?
The short answer is: generally, no. Inheritance received by one spouse during the marriage is typically considered separate property, not marital property. This means it's not subject to equitable division during a divorce.
However, this isn't always a clear-cut situation. The key lies in how the inheritance is handled after it's received.
What if the Inheritance is Commingled?
This is where things get complicated. Commingling refers to mixing separate property (like an inheritance) with marital property. If a spouse deposits an inheritance into a joint bank account, invests it in a jointly-owned property, or otherwise inextricably blends it with marital assets, it can lose its separate property status and become subject to division in a divorce. The court will attempt to trace the inheritance to determine how much, if any, remains separate property. This tracing process can be complex and often requires expert financial testimony.
How is Commingling Determined?
Illinois courts meticulously examine financial records to trace the inheritance. Factors considered include:
- The source of funds: Clear documentation showing the inheritance's origin is crucial.
- Account activity: Tracking the flow of money into and out of accounts is essential.
- Investment decisions: How the inheritance was invested and the subsequent gains or losses will be reviewed.
If clear evidence proves commingling, a portion (or all) of the inheritance might be deemed marital property.
What if the Inheritance is Used to Improve Marital Property?
If an inheritance is used to substantially improve marital property (e.g., using inheritance funds to pay off the mortgage on a jointly owned home), the court may consider the increase in value attributable to the inheritance as separate property, while the underlying asset remains marital property. The specifics of this apportionment depend on the facts of each case and require careful analysis.
What About Gifts Received During the Marriage?
Unlike inheritances, gifts received by one spouse during the marriage are generally considered separate property only if the gift is explicitly designated to that one spouse. If a gift is received jointly, it's considered marital property.
What Happens to Inheritance in a Divorce?
In a divorce, separate property, like an inheritance that hasn't been commingled, typically remains the separate property of the receiving spouse. However, the court might consider the inheritance when determining the overall equitable distribution of marital assets. This means the court might adjust the division of other marital assets to account for the existence of the separate inheritance.
Can I Protect My Inheritance?
Yes, taking proactive steps to protect your inheritance is crucial. Keeping inheritance funds separate from marital accounts, avoiding commingling, and maintaining meticulous financial records are vital strategies to preserve its separate property status. Consult with an experienced Illinois family law attorney to discuss specific strategies for protecting your inheritance.
This information is for educational purposes only and does not constitute legal advice. Consulting with a qualified Illinois family law attorney is essential for personalized guidance on your specific situation.
