If you receive an inheritance from your parents or grandparents while you are married, your first instinct may be to share it with your spouse. Perhaps the two of you want to use the money to make a joint purchase, like buying a business or buying a home together. Or maybe you just want to put the inheritance into your shared investment portfolio, increasing your earning power as those investments grow.
This can be a viable way to use your inheritance from a financial perspective, and it is certainly natural that you would consider sharing the money you got from your parents with your spouse. But it is important to know that this creates a significant amount of risk, especially if you eventually get divorced.
Separate and marital assets
The thing to remember is that marital assets have to go through property division, and separate assets do not. When you first receive your inheritance, unless your spouse is included in the gift, it is a separate asset. If you get divorced, you still get to keep the inheritance your parents gave to you.
However, if you commingle it by mixing it with funds that your spouse has access to or by making a joint purchase together, then you change the status. The inheritance becomes a marital asset. This means that you and your spouse both own it, so it does have to go through property division as you get divorced. You could lose a portion of the inheritance that you expected to keep.
It is very important to carefully consider how you use your funds during a marriage, and this is a common cause of disputes during a divorce. Make sure that you are well aware of the legal steps you can take to protect your assets at this time.