Will I lose my inheritance and premarital assets in my divorce?
 

“Are my premarital or inherited assets protected if my marriage ends in divorce?”  It’s a question I’m often asked by a spouse who comes into a marriage with substantial assets, family wealth or who expects to receive a substantial inheritance in the future.  Unfortunately, like many other issues in the law, the answer is an unsatisfying “It depends.”

There is no automatic rule about whether or not inherited assets or premarital assets will be excluded from consideration when a couple is divorcing in Connecticut.  But, there are ways for affluent individuals to protect these assets before it comes to that.  The best way is to have a well-written pre-nuptial (“pre-nup”) agreement that is enforceable by the court and is in place at the time of the marriage. In some cases, it’s also possible to have what’s called a post-nuptial agreement – that is one written after the marriage- but a well-written pre-nup is preferable.

If a pre-nup is not in place when divorce proceedings begin, things get challenging.  In Connecticut (unlike states like New York and California) potentially all assets (even premarital and/or inherited) are subject to division at the discretion of the trial court.  This is unlike other states that have laws that may automatically exclude certain assets from the pot.  In this state, the judge, who has broad discretion, decides what they believe to be equitable.  In Connecticut, these decisions are made on a case-by-case basis with the outcome being very heavily dependent upon the facts and circumstances of each case.

Among the factors that go into a judge’s ruling may include:

  • The length of the marriage
  • The timing of when an inheritance was received
  • What happened or didn’t happen with the inheritance/premarital assets during the marriage
  • How the inheritance/premarital assets were used (or not used)
  • Whether or not the other spouse made any contribution to the preservation or appreciation of the inheritance/premarital assets.

What about substantial assets that are received at the very end of the marriage or even during the divorce case?  In these situations, most likely, they will not be subject to division during the divorce.  But, the presence of those assets cannot be completely ignored either, especially when attempting to settle the case.  Remember, all decisions are at the discretion of the judge.

Another very important factor in a judge’s decision is the magnitude of premarital / inherited assets as compared to the marital assets overall.  If the inheritance or premarital assets represent a very minimal or small portion of the total marital assets, the judge may be more inclined to exclude them from the property settlement. However, if excluding the inherited or premarital assets would be tantamount to gutting the marital “pot” of assets, there’s a good chance they will be included in the asset division.

Nothing is fool-proof when it comes to the law.  If you have a pre-nup or post-nup there’s some assurance that you will be able to keep the assets out of the divorce settlement.  But if you’re married 20 years and financial circumstances have changed drastically during the marriage, the court may very well rule that a two-decade old pre-nup, especially if rigid and one-sided, should not be enforced.   The best pre-nup is one that is flexible enough to account for drastic change over time.

Our best advice to those expecting to inherit substantial wealth or who are coming into the marriage with substantial assets is to settle those matters with their intended spouses before the marriage.

By Attorney Peter M. Bryniczka

 

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