Hello,
Married in NY (no prenup), living in NC for over 10 years, I’ve read that pre-inheritance / gifts money just needs to be placed in a separate personal account, not used to pay for anything ‘common’ like bills/food/mortgage etc to avoid risk of ‘co-mingling’. Same question for personal bank account that existed before the marriage and had money it it from prior gifts and past employment. Is there anything else needing to be done to ensure that money would be ‘safe’ from a divorce ? Is this a CPA or a lawyer question?
Thanks for your time
Bob
Funds that you had on the date of marriage are your separate property and not subject to being divided in equitable distribution in a divorce.
But if the funds you had in an account at date of marriage have been comingled with marital funds (for example, money earned during the marriage was deposited into the same account and there were also debits to that account) such that it would be impossible to determine what funds in the account are pre-marital and separate and what funds are marital and earned during the marriage, then the full account balance could be considered marital and subject to being divided.
Inheritances work the same way. Inheritances, even if received during the marriage, are the separate property of the receiving spouse unless the inheritance money is comingled with marital funds such that it is impossible to determine what funds are separate/inheritance and what funds are marital.
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 appreciate your response and understand how important it is not to use the account for anything “common”. As a follow up question, will regular interest income from that account, going to that account still be “protected”? Gets complicated when taxes on that interest are due and I’m filing jointly… And if I purchased property using the cash from my “personal” account, would it still remain mine 100% ?
The interest generated on any inheritance funds would be the spouse’s separate property since the source of the interest funds is separate property (the inheritance is separate property).
Taxes due on the interest generated from inheritance could be considered the spouse’s separate debt. Joint tax returns could be filed and the CPA or other tax preparer could determine the amount of taxes owed on just the inheritance.
If you purchased an asset using exclusively your separate property inheritance, then the asset would continue to be your separate property. The key is the source of funds used to acquire an asset. Real property is a bit different.
If you purchased real property while still married, your spouse would have to sign a free trader agreement in order to keep the real property your separate asset.
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.
So basically, that money is pretty much tied up and can’t be used for anything without proper paperwork signed by spouse (especially for real estate) …Using it to pay for exceptional things like a family vacation would be considered co-mingling… I’m assuming an exceptional gift to the spouse using that bank account could also cause complications…
Would using it occasionally for “gifts to self” like a new car or BMW driving experience class be considered as co-mingling ?
Thanks again
PS: If (when) things go south, Rosen will be my first choice.
We will be happy to help if you need us.
The key to determining whether comingling occurred or not is to be able to trace all of the funds. If you can determine from statements which portion of the funds in an account were inheritance separate property and what was marital, then you would be able to separate any comingling and the inheritance can stay separate. But if it is impossible to determine which funds in an account are separate and which are marital (for example, if many deposits were made throughout the years), then comingling will have occurred and the entire account balance could be determined marital property.
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.
I should specify that regarding the funding of those accounts in my name only, there is no income from any source that occurred during marriage. Just pre-marital savings and parental gifts. There has never been any intention of hiding income during marriage. If that account is used to pay anything other than real estate, like a car, would that car be considered my own asset exempt from “common” marriage property that would be accounted for in a division of assets ?
Thanks again
If 100% of the funds in an account are your separate property and those funds are used to purchase an asset other than real estate, then that asset would be your separate property assuming you didn’t finance the purchase of it.
Savings from before the date of marriage are your separate property. Monetary gifts from your parents to you during the marriage are your separate property assuming the gift was not made out to both you and your spouse.
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.