The husband and wife are married. The husband receives an inheritance after a member of his family passes away. Is it fair if my husband receives a house during our marriage? Fairness may have nothing to do with it. What the inheritance is about is more important. Is it going to be a separate property or a marital property? That’s the question.
Click here to watch the video on If My Spouse Inherits A House During Our Marriage, Is It Fair Play In Michigan?
The judge will view the situation as the couple did before getting a divorce. The court will view the property as separate if your spouse inherits a house but after probate simply leaves it alone and does nothing about it. If you accept the inherited home, remodel it with marital money, or give it to your marriage as a gift, the court will view it as a marital asset that is subject to property division.
One spouse’s inheritance during a marriage is viewed as separate property. While the pair is still married, if one spouse receives damages for pain and suffering in a personal injury action, the damages are often viewed as separate property.
So if your spouse suddenly inherits a house, the question is not about being fair. The question is will the house be separate or a marital property.
Your Spouse Can Choose To Keep It Separate
If you have some respect for your spouse, you shouldn’t object to your spouse keeping the inherited house separate. Under Michigan law, your spouse can keep the house separate because it is an asset acquired through inheritance.
This is how your spouse will be able to keep it separate from your other marital property.
If you have an antenuptial or prenuptial agreement, you probably know that she can keep the house separate if the prenup agreement says so. Your prenup will probably define what other assets will remain separate and how much of it will be kept separate from your marital assets. But just in case you or both of you are not celebrities yet or part of the wealthy elite with high net worth, your spouse will probably do one or a combination of any of the following measures to keep the inherited house a separate asset:
[1] Not doing anything to the house and letting the asset sit.
[2] Paying taxes of real estate properties and earnings from these properties drawn from sources under your spouse’s name only or are coming from sources attributed to your spouse’s personal account or from checking accounts with your spouse’s name only. As much as possible your spouse will get the cash from earnings of gifted or inherited property to pay for the income taxes for earnings from these inherited property.
[3] Your spouse will keep a record and maintain an accurate property record to establish the personal asset as a separate piece of property under your spouse’s name only.
[4] Your spouse will refrain from adding your name to the certificate of title of the separate property at your spouse’s own accord or by the advice of your spouse’s attorney.
[5] Your spouse will refrain from making repairs or upgrades to the inherited property using your marital funds or asking your help in the repairs and upgrades of the inherited property.
Your Spouse Loves You So Much
Then again your spouse might just love you so much and make the inherited property part of the marital assets or give all of it to you. You’re one lucky…
Now this is how your spouse is going to show you how much love there is. Your spouse is going to “gift” the inheritance to your marriage. Your spouse is going to add your name in the certificate of title. By doing that, your spouse declared you also an owner of the property.
In essence, your spouse just compromised the ownership of the property. This property now became a marital asset subject to property division later in the event of a divorce.
Hopefully, you never get divorced.
Just in case you’ve been contemplating on getting a divorce and would like to know if there’s another way you can get a slice of your spouse’s separate property (or another inherited property), here’s another way.
Your spouse, not deliberately or intentionally, might inadvertently transform a separate property into a marital asset.
Here’s how this is going to happen.
There Is Such A Thing As Commingling
It’s important to keep in mind that separate property may occasionally overlap with or change into marital property throughout a marriage, depending on the legal norm. For instance, if the separate property was used for the family’s benefit or if it was combined with marital property. This is what you call commingling of properties.
The word “commingled property” refers to the blending of separate property with marital property.
One spouse may be entitled to a share of the other’s separate property if the spouse receiving the property “contributed to the acquisition, improvement, or accumulation of the property.”
This exception may take the form of a house that your spouse inherited and greatly increased in value with your assistance. This is the reason your spouse will not ask you to assist or help in the repairs and upgrade of the inherited spouse. Doing so will muddle the ownership and separation of the property from marital assets.
There’s other scenarios you may encounter with commingling.
After purchasing your new marital house, both of you discover that it needs a lot of upkeep. For many of the renovations, the both of you became dependent on the funds from your joint savings account, which you created before the marriage. The house’s worth rises as a result of the improvements.
Your spouse already had a savings account before you got married. When you get married, your spouse wishes to purchase a home with you. Your spouse pays the down payment on the marital home with money from her personal savings account. Your spouse’s personal savings account just got commingled.
Your spouse sells equities previously bought from the union in order to raise money for a small business that you want to launch together. Your business is now commingled.
Once you hear about the inheritance, find out if the inheritance was for your whole family and not just for your spouse?
Property that is inherited after the date of marriage but is solely given to one spouse is typically categorized as separate property.
You don’t have to be fair but you can have a slice of the inheritance according to Michigan statutes if the inherited property gets commingled.
Or, you can just love your spouse to death and get more.
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