My husband and I are separating soon. My Dad died recently and there is an inheritance coming my way. I understand as long as the IRA and the brokerage account is in my name only, that is not any sort of problem for me. Can you please confirm that it is okay for me to go ahead and receive these without penalty? Also, I have another brokerage account that was used during the course of our marriage. That brokerage account is in my name also. Do I owe my spouse half of this brokerage account because it was used in our marriage? Finally, I have a retirement account that was accumulated in the course of our marriage. I think I need to share this with my spouse, that is correct, right? Why is that different than the new brokerage account? I am trying to figure out the rules for distribution. Thank you so much for your help on this front, I sincerely appreciate this service and your assistance.
Generally assets acquired during the marriage (between the date of marriage and date of separation) are subject to being divided in equitable distribution except for inheritances.
Your inheritance from your dad will be considered your separate property even if you acquire it during the marriage (before the date of separation). It is fine to take the inheritance now. It is best to keep the funds in their own/separate account (IRA, brokerage, etc.) in only your name so as not to comingle the funds in an account with marital funds (funds earned during the marriage).
You may or may not have to divide the brokerage account that you used during the marriage. The key is look at the source of funds in that account - it is irrelevant whether you used the account in the marriage or not. If you acquired and funded the account before the date of marriage and never contributed to it during the marriage, then that account is your separate property and not subject to equitable distribution. If you funded the account before the date of marriage and during the marriage, then that account will have both a separate property and marital property classification to which the marital property portion only would be subject to being divided.
The retirement account that you acquired and funded during the marriage is subject to being divided in equitable distribution because it is marital property. It is marital property because you funded it during the marriage with funds earned during the marriage (assuming you were funding from an employment source).
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
Anna, I can’t tell you how much I appreciate your help. That final account you mention – the brokerage account – was an inheritance from my Mom that came to me in the course of the marriage, We did use funds from that account during the marriage. Do I owe my spouse half of the remaining funds in that account? Thank you, again, so much for your help. This is a terrific service and I am deeply grateful.
For the brokerage account that is in your inheritance from your mother: that is your separate property and your husband is not entitled to receive half of the remaining balance (this is assuming you have not contributed any funds to this particular account during the marriage).
The funds that you did use from the inheritance account would be considered a gift to the marriage and you would not be entitled to a credit or reimbursement of these funds.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.