Is your spouse entitled to your inheritance?
If you keep your inheritance in a separate, non-joint account, it’s possible for your inheritance to remain yours.
However, things can get tricky if you commingle the money into joint funds or buy property that you both use, according to attorney Jade Chounlamountry.
“Suppose you deposit inherited funds into a joint bank account. Then you use that bank account for common marital assets. This is the ‘commingling’ of the inheritance. In that case, the inheritance can lose its status as separate property,” Chounlamountry explained in a FindLaw article.
The question of property is complicated though, and can be dependent on whether you live in a community property state or an equitable distribution state — each dividing marital assets differently.
If you live in an equitable distribution state like Florida, for example, the court could decide to divide your marital assets however they deem fair in a divorce — even if it’s not equal, according to TRW Law. If your inheritance has somehow become a marital asset through the way it’s been spent or invested, it could be subject to this process.
Though the Reddit user and his wife aren’t necessarily in this position, these are things he may want to discuss with a lawyer if he has no interest in ever having to share it.
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Learn MoreInvesting your inheritance
Before the user even decides what to do with the money, he should figure out if he has to pay any inheritance tax. While there’s no federal inheritance tax, six states take a percentage of what’s passed on to you including Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania (though Iowa is phasing out its state inheritance tax in 2025).
After paying off taxes and debts, the heir may decide to invest the inheritance in the stock market or alternative investments using a financial planner or brokerage.
Investing over a long period of time using the dollar-cost averaging method may be something to consider for long-term financial growth.
And finally, looking at diversifying your portfolio with investments at different risk levels is always a good idea — something both people in a marriage might agree on.
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