An inheritance can represent a significant asset with meaning beyond its financial value. When someone who has received or expects to receive an inheritance is planning to marry, protecting that asset from becoming subject to equitable distribution in a potential future divorce is a question with real financial stakes — one that thoughtful planning can address before a marriage begins.
Mandelbaum Barrett PC family law co-chair Lynne Strober addressed a reader’s question on protecting inherited assets before marriage in the NJ.com Biz Brain column. Strober co-leads the firm’s family law practice and regularly advises clients on prenuptial agreements, equitable distribution, and asset protection strategies in divorce proceedings throughout New Jersey. Her contribution to the Biz Brain column reflects the firm’s commitment to making practical legal guidance available to New Jersey residents on questions that matter to their financial lives.
How New Jersey Treats Inherited Assets in Divorce
Under New Jersey law, equitable distribution applies to marital property — assets acquired during the marriage by either spouse. Inheritances received during the marriage are generally excluded from equitable distribution and treated as the separate property of the recipient spouse, provided they are kept separate from marital assets. This protection, however, can be undermined by commingling — mixing inherited funds or assets with marital property in ways that make the inheritance difficult to trace.
If an inheritance is deposited into a joint bank account and used interchangeably with marital funds for household expenses, it may lose its separate property character. Similarly, if inherited real property is titled jointly with a spouse or if marital funds are used for significant improvements, a court may find that the property has been partially transformed into marital property. The key is maintaining the clear, traceable separate character of the inherited assets throughout the marriage.
Tools for Protecting an Inheritance Before and After Marriage
Several approaches are available. A prenuptial agreement executed before marriage can explicitly define inherited assets as separate property and address how they will be treated in the event of divorce. Prenuptial agreements can cover both existing inheritances and assets expected from identified family members in the future. A well-drafted agreement executed voluntarily, with full financial disclosure and independent legal representation for each party, provides strong legal protection.
After marriage, keeping inherited assets in separate accounts or titles, avoiding the use of marital funds to improve or maintain inherited property, and maintaining clear documentation of the inheritance and its subsequent management all help preserve the separate character of inherited assets. According to the New Jersey Courts, equitable distribution principles govern how marital property is divided upon divorce, and careful documentation is an important part of demonstrating that inherited assets remain separate property.
Planning When a Future Inheritance Is Expected
For individuals who anticipate receiving inheritances from family members, conversations with legal advisors — and sometimes with the family member whose estate is at issue — can help establish arrangements that preserve the separate character of expected assets before any transfer occurs. How an inheritance is structured and transferred can affect how it is treated in a later divorce proceeding, making early planning particularly valuable.
Contact Mandelbaum Barrett PC for Family Law Guidance
If you have questions about protecting inherited assets, prenuptial agreements, or equitable distribution in New Jersey, the family law team at Mandelbaum Barrett PC can help you understand your options and plan effectively.
Reach out through our contact page to speak with our team. We are here to help you protect what matters most.