Going through a divorce in Indianapolis is already difficult. The thought of losing an inheritance, money, or property that a loved one left for you can make the process feel unbearable. I often hear people ask, “Is an inheritance considered marital property in an Indiana divorce?” The short answer is that an inheritance is part of the marital estate. However, that does not mean you will lose it all.

Indiana law requires a fair, equal division of all marital property. The property split is assets acquired during the marriage and inheritances, gifts, and even personal injury settlements when the married couple’s finances were commingled. Every asset, no matter how it was acquired or whose name is on the title, will be evaluated.

Understanding Indiana’s “One-Pot” Theory of Marital Property

Indiana Code § 31-15-7-4 lays out the rules for dividing property in a divorce. The statute says all property, whether the property was owned by a spouse prior to the marriage, or was acquired by either spouse after the marriage but before the final separation, or acquired through their joint efforts, is part of the marital estate. An inheritance falls into this broad definition, so it must be included in the property division calculation. This is a significant difference from other states, which might treat an inheritance as separate property.

Imagine a couple living in the Meridian-Kessler neighborhood. The husband inherited his grandmother’s house in Brownsburg before they married. Even though he owned the house alone and brought it into the marriage, it is still considered a part of the marital estate and subject to division. The same rule applies to inheriting cash, shares or any other asset.

The law starts with the assumption that a 50/50 split is fair. A judge can deviate from this if an equal split is not just or reasonable. In such cases, inheritance can be treated differently.

How to Protect Your Inheritance in an Indiana Divorce

Even though an inheritance is marital property, you can argue to keep more of it. A court must consider evidence that an unequal division is needed. This is where the story of an inheritance becomes important.

I believe in giving my clients a voice, and a big part of that is telling their story in court. We would work together to show a judge why an unequal division is fair.

A court will look at several factors when deciding how to divide assets. These factors are outlined in the statute and include:

  • Contributions made by each spouse in acquiring the property, whether the contribution or in other types of support.
  • How a property was acquired, whether it occurred before the marriage or was purchased through an inheritance or gift.
  • Each spouse’s financial situation at the time the division becomes effective.
  • The conduct of each spouse during the term of the marriage if that conduct will affect the fair distribution of the property.
  • The earning ability of each spouse.

If you inherited money from your mother and kept it in a separate bank account, never mixing it with your spouse’s funds, we can show that to the court. We can argue that since your spouse did not contribute to the inheritance, you should receive a greater share of it. The closer your inheritance is to its original, separate form, the stronger our argument.

The Importance of Keeping Inheritances Separate

You must be able to prove that the inheritance remained separate. If you mix inherited funds with marital funds, a court may see it as a gift to the marriage. A key way to protect an inheritance is to keep it in a separate account in your name only.

Let’s say you inherited $100,000 and used it as a down payment on the marital home you bought with your spouse. That money is now comingled. It is now part of the marital home’s equity. While we can still make an argument for a larger share, it becomes more complex. We must trace the funds and their use, a process that can be difficult without clear records.

For example, imagine a wife in a divorce on the northwest side of Indianapolis who inherited money from her father. She used some of the money to pay the mortgage on the family home. She also used some to buy her spouse a new car. The court would likely see the money used for the car as a gift to the spouse, and the money used for the mortgage payment as a contribution to the marital estate. The court may not credit her the full amount.

Protecting Your Future With a Prenuptial or Postnuptial Agreement

For couples who have not yet married, a prenuptial agreement is a powerful tool. A prenuptial agreement is a contract you and your spouse create before you get married. It can define how to handle property, including an inheritance, in case of a divorce. In a prenuptial agreement, you can decide that any future inheritances will be treated as separate property and not subject to division.

A postnuptial agreement is a similar contract created after you are already married. While they are less common, they can serve the same purpose. These agreements can prevent future disputes and give you peace of mind.

Of course, these agreements must be handled carefully. They must be fair, and both parties must have the opportunity to have their own attorney review them. An attorney can help you draft an agreement that is fair and enforceable.

Finding the Right Support in Indianapolis

I understand that dealing with a divorce and protecting what is yours is overwhelming. As an attorney, I take a caring, compassionate approach to my work. I know that divorce is a personal journey, and I am here to help you through it. My goal is to protect your rights and give you the representation you deserve. I am dedicated to giving you a voice and ensuring your side of the story is heard to help you seek a fair outcome.

If you are facing a divorce in Indianapolis or anywhere in Indiana and are concerned about your inheritance, The Law Office of Deidra Haynes is here for you. We can discuss your situation and your options. Do not face this alone. You can reach me by calling 317-785-1832 to schedule a consultation.