Dividing assets later in life creates complexity, especially when inheritances enter the picture. If you’re facing a gray divorce in Tennessee, you may wonder whether your inheritance stays yours or becomes part of the marital estate. The answer depends on how you handled the inheritance during your marriage.
When does inheritance qualify as separate property?
Tennessee law classifies inheritances as separate property if you keep them in your name only. If you receive money or assets from a relative and avoid placing them in joint accounts or spending them on shared expenses, the court usually leaves them untouched.
Mixing inherited funds with marital assets, however, puts that protection at risk. One deposit into a joint account or one use for marital spending can turn separate property into marital property.
How inheritance becomes marital property
Inherited assets lose their separate status when you combine them with shared resources. This action, called commingling, happens when you place inherited money into a joint account or spend it in ways that benefit both spouses, like paying off a mortgage or funding home upgrades.
Inherited property also becomes marital if both spouses use it or contribute financially to it. For example, when both spouses make improvements or live in an inherited home, the court often treats the property as jointly owned. Your choices play a major role in how the court classifies inherited assets.
How to protect inherited assets
To keep inherited funds separate, avoid merging them with shared money. Open a separate account in your name only. Don’t use inherited money for joint expenses. If you anticipate a divorce, gather documentation that shows where the inheritance came from and how you’ve kept it separate.
Even if you already mixed it with shared assets, you may still protect part of it. Courts can identify a portion as separate property based on your financial behavior and intent.
Tennessee courts examine how you used the inheritance and whether your actions showed intent to keep it separate. Accurate records and clear decisions help you maintain control over inherited assets.
