Dear Quentin,

I’ve been married 26 years, and my husband and my father have never really gotten along well. At some point in the near future, I will inherit a significant amount of money (several million dollars). I want to spend and invest this money as I wish. 

If anything happens to me, I want my children to inherit these funds. How do I ensure my husband never gets his hands on my inheritance? If we ever divorce, what should I do to make sure my spouse cannot access this money?

Loyal Daughter

Dear Loyal,

It would seem churlish not to say congratulations on your impending windfall.

You say your husband of 26 years and your father have never really gotten along well, so I can understand that your father would like to make sure that this money remains in your name only. The good news is that inheritance is generally not considered community property. It’s all yours. You can spend and invest it as you please. Well, there are some caveats to be aware of.

Community property is generally anything acquired during the marriage, but that does not apply to inheritance. There are exceptions. If you commingle that inheritance by depositing it in a joint savings account, that money would then be considered community property. Prenuptial and postnuptial agreements can also add more specific conditions for inheritances.

In most states, the inheritance must also not be seen to be commingled with marital assets, and also not be used to benefit the marriage or your spouse. So consult a lawyer before you spend the money, and think twice before — say — buying a marital home for you and your husband, especially if you were to consider putting his name on the deed. 

This is a cautionary tale to always make an effort to get along with your in-laws, even if they sometimes drive you crazy.

If you were to also inherit your father’s home, it’s also likely to remain separate property. “In New York, inheritance of a real object, such as a house, cannot be transmuted from separate property to marital property by any effort, contribution, or residence by the non-titled spouse,” according to Anthony J. LoPresti, an attorney based in Garden City, N.Y. 

There are other rules to be aware of when inheriting property, depending on what state you live in. Among them: “In the case of a house, if the non-titled spouse worked to increase the home’s value, then during a divorce, the judge may consider the home’s increased value marital property, but overall, the property remains separate,” LoPresti, the New York-based attorney, adds. 

Reading between the lines, it sounds like your relationship with your husband has seen better days. Marriage, of course, can often be an epic white-water rafting trip that can last for decades through rough and calm waters, and the occasional island paradise on the way. Regardless of where you are now in your marriage, you are smart to make sure you have your own financial independence.

This is a cautionary tale to always make an effort to get along with your in-laws, even if they sometimes drive you crazy. Your father and husband no doubt share equal responsibility for that. One final suggestion: You may or may not divorce, but one of you will most likely predecease the other. So I also urge you to make a will, outlining exactly where you would like your inheritance to go.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

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