How Do Inheritances Impact a Virginia Divorce?
When couples are getting divorced and one of the spouses has received a significant inheritance (or they are going to receive one in the near future), they often wonder how this inheritance might impact the divorce settlement. What effect (if any) will an inheritance have on the division of property? How will it impact alimony/spousal support?
There is no straightforward answer to these questions that applies in all cases. While the Commonwealth of Virginia generally treats an inheritance as separate property and not part of the marital estate, things do not always work out that way. And as far as alimony/spousal support is concerned, inherited property could be one of the factors in determining whether this will be awarded and how much should be paid.
Considering a divorce in Virginia and concerned about how your inheritance might be affected? Buck, Toscano & Terezkerz is here to help. Call us today at (434) 977-7977 to set up a consultation with one of our attorneys.
How Inheritances Affect the Division of Marital Property in Virginia
Under Virginia Code § 20-107.3, inherited property and gifts from third parties are considered separate property. This applies to property that was inherited before the marriage, during the marriage, or an inheritance that the spouse is about to receive in the near future. Either way, inheritances belong solely to the spouse who received it.
There is one big caveat to all of this, however. Inheritances (or any other type of property that would normally be considered “separate”) can become part of the marital estate when the property is co-mingled with marital property.
Here are some examples of co-mingling that could cause an inheritance to become marital property:
- Funds from an inheritance are deposited into a joint bank account and spent over the years to pay for various household expenses.
- Funds from an inheritance are used for a down payment on a home that is in the name of both spouses.
- Funds from an inheritance are used to improve a home that the spouses own together.
- Funds from an inheritance are used to purchase a vehicle, furniture, or other property that is also in the name of both spouses.
- A spouse uses funds from an inheritance to invest in a joint-stock portfolio to which the other spouse is also contributing.
With any of these scenarios, the separate property from an inheritance could technically be converted into “hybrid property”, meaning that the property is part marital and part separate. But as a practical matter, it can be very costly to try to untangle all of this to get to the bottom of exactly what percentage belongs in each category. In a case like this, it is best to rely on the advice of your attorney as to the best way to address this.
How Inheritances May Impact Alimony/Spousal Support
The determination as to whether a spouse should receive alimony is based on a number of different factors, but essentially it all boils down to need on the part of the lower-earning spouse and relative financial capability on the part of the higher-earning spouse. If either spouse receives an inheritance, particularly a large inheritance, there is a very good chance that this will factor into the equation.
For example, if the payor spouse receives a significant inheritance that is enough to produce an additional ongoing income stream, that would give them an increased financial capability to provide for the recipient spouse. In a case like this, it is likely that the recipient spouse would ask for more alimony based on their spouse’s increased ability to provide.
If, on the other hand, the recipient spouse is the one who receives a large inheritance, then this would likely lower the amount of alimony they would receive. And depending on the size of the inheritance, this spouse might not be considered “dependent” any longer, in which case, there would be no need to pay alimony at all.
It is important to note that when it comes to inheritances and alimony/spousal support, an inheritance that is expected to be received from someone who is still living would not be factored in. In this situation, although you may have good reason to believe that you have a large inheritance coming someday, you cannot necessarily count on it for sure.
This is, however, something that could be revisited later on if the inheritance does come to fruition. If/when that happens, either spouse may file a petition to modify the alimony (either up or down depending on which spouse receives the inheritance) or cancel the alimony payments altogether.
Contact Our Seasoned Virginia Family Law Firm Today
Dealing with an inheritance is just one of many potentially complicated issues that could impact a divorce in Virginia. To ensure that your legal rights are protected throughout the process, it is important to work with an experienced family law attorney. Take the first step now by contacting Buck, Toscano & Terezkerz for a personalized consultation. Call us today at (434) 977-7977 or send us an online message to get started.