A Compassionate Advocate
For Arizona Families

What happens to inherited property when you divorce?

On Behalf of | Oct 25, 2022 | Property Division

Property division is a complex and often contentious aspect of divorce. In Arizona, the court must divide community property equitably, though not necessarily equally, between divorcing spouses.

If you received an inheritance during your marriage, you may wonder if your spouse can take a portion of it in the divorce. Whether or not your spouse has a claim on part of your inheritance depends on what you have done with those assets.

Inheritances are separate property

Arizona law treats gifts and inheritances as separate property, along with any profits from said property. For example, if you inherit money and deposit it in an interest-bearing account, both the money and the interest remain your separate property. If you inherit a house and rent it out, the rental income is yours as well.

However, keeping separate property distinct from marital property can be difficult. An inheritance may become marital property depending on what you do with it.

Your inheritance may become marital property

There are many ways separate and marital assets can become commingled. A common scenario occurs when one spouse inherits a sum of money and deposits it in a joint account. Once you do this, the money and anything you purchase with it becomes marital property. If the joint account accrues interest, the interest is community property as well.

You can commingle real property as well. If you inherit a rental property, the house and rental income are yours alone. However, if you spend community funds on renovations or maintenance, the house can become marital property.

When it comes to inherited property, determining who gets what in a divorce is not always straightforward. Generally, however, you can protect your inheritance by keeping it separate from marital property.