When Does an Inheritance Become Marital Property in South Carolina?

In South Carolina, inheritances are considered separate, non-marital property solely belonging to the spouse who received it. However, the lines can become blurred depending on how the inherited assets are handled during the marriage.

There are specific instances where inheritance may transition to marital property that could be divided during a divorce. This overview explains when that transformation occurs under South Carolina law and why it’s a key consideration for any married individual expecting or receiving an inheritance.

What Constitutes Separate Property?

In South Carolina, separate property is assets that belong solely to one spouse and are not subject to division in the event of a divorce. Inheritances, along with gifts and assets owned before marriage, are generally considered separate property under South Carolina law.

This means that if you receive an inheritance from a family member or a loved one, it is legally yours and yours alone. South Carolina follows the equitable distribution model, which means that in the event of a divorce, marital property is divided equitably (though not necessarily equally) between the spouses.

When Does an Inheritance Become Marital Property?

While inheritances are typically regarded as separate property, there are circumstances in which they can lose their separate status and become marital property. This process is known as “transmutation” or “commingling,” and it occurs when the inherited assets are combined or mixed with marital property.

For instance, if you receive an inheritance and deposit the funds into a joint bank account shared with your spouse or use the inherited money to pay for joint expenses or investments, the inherited assets may be considered transmuted into marital property.

Maintaining the Separate Nature of an Inheritance

To prevent the inadvertent transmutation of your inheritance into marital property, it’s crucial to take proactive steps to keep the assets separate.

• Establish a separate bank account or investment portfolio solely in your name, where you can maintain the inherited funds or assets without commingling them with marital property.
• Maintaining clear records and documentation of the inherited assets’ origin and ownership.
• Retain copies of wills, trust documents, or other legal instruments that demonstrate the inheritance’s separate nature.

By taking these precautions, you increase the likelihood that your inheritance will be considered separate property in case of a divorce or legal dispute.

Inheritance and Divorce Proceedings

In the unfortunate event of a divorce, classifying an inheritance as separate or marital property can significantly impact the division of assets. South Carolina follows the principle of “equitable distribution,” which means that marital property is divided fairly (though not necessarily equally) between the spouses, considering various factors.

When it comes to inherited assets, the length of the marriage and the extent to which the inheritance has been commingled with marital property are crucial in determining how it will be treated during the divorce proceedings.

In some cases, even if an inheritance is considered separate property, a portion of its value or appreciation may still be subject to equitable distribution.

Protecting Your Inheritance in the Event of a Divorce

While maintaining the separate nature of an inheritance is important, there are additional steps you can take to safeguard your inherited assets in the event of a divorce.

• One option is to enter into a prenuptial or postnuptial agreement, which can clearly define the ownership and treatment of inherited assets in the event of a divorce.
• Proper estate planning and asset protection strategies can also play a vital role in preserving your inheritance.

Working with experienced attorneys at Steele Family Law, we can guide you through creating trusts, implementing asset protection strategies, and ensuring your inheritance remains separate and protected.

Frequently Asked Questions (FAQs)

If I inherit money during my marriage in South Carolina, is it considered separate or marital property?

An inheritance one spouse receives during the marriage is considered separate property belonging solely to that spouse in South Carolina. However, if the inherited funds are commingled with marital assets or used for joint expenses, the inheritance may lose its separate character and become marital property subject to equitable distribution in a divorce.

Can my spouse claim part of my inheritance in a South Carolina divorce?

While an inheritance is typically considered separate property in South Carolina if it was commingled or transmuted into the marital property during the marriage, a portion of its value or appreciation could be subject to equitable distribution in a divorce. The specifics depend on factors like the length of the marriage and how the inheritance was treated.

How can I keep my inheritance separate from marital property in South Carolina?

To maintain an inheritance as separate property in South Carolina, keep the inherited assets segregated in a separate bank account or investment account solely in your name. Avoid blending the inheritance with marital funds or using it for joint expenses. Proper documentation of the inheritance’s separate nature is also crucial.

Preserve Your Inheritance With Steele Family Law

At Steele Family Law, we understand the emotional and financial significance of inheritances, and we are committed to providing you with the support and counsel you need during this journey.

Whether you’re seeking guidance on protecting your inheritance, navigating divorce proceedings, or implementing effective estate planning strategies, our team is here to empower you with the knowledge and tools necessary to safeguard your assets and secure your future.

Don’t hesitate to contact Steele Family Law today. Together, we’ll chart a course that preserves your inheritance and upholds your rights, ensuring a brighter tomorrow for you and your loved ones.