Inheritance in divorce

[teresarae]

What is the name of your state (only U.S. law)? Mississippi
I inherited 300,000 life insurance from my mother 2 years ago. I have kept the money in a seperate account. Last year times got tough so i made 2 house payments with the money. Did I make the whole 300,000 marital property? Also, we filed taxes jointly do I owe him half the interest money I have earned?

[Ohiogal]

Originally Posted by teresarae

What is the name of your state (only U.S. law)? Mississippi
I inherited 300,000 life insurance from my mother 2 years ago. I have kept the money in a seperate account. Last year times got tough so i made 2 house payments with the money. Did I make the whole 300,000 marital property? Also, we filed taxes jointly do I owe him half the interest money I have earned?

That is still separate property. YOu made the amount you used to pay the house payment marital property. You made whatever part of the tax refund came from the separate money marital property. The rest of the inheritance is still your separate property.

[LdiJ]

Originally Posted by Ohiogal

That is still separate property. YOu made the amount you used to pay the house payment marital property. You made whatever part of the tax refund came from the separate money marital property. The rest of the inheritance is still your separate property.

I agree...and just in case you didn't fully understand OG's response, that means that the principal (what you inherited) and the interest are still your own separate property. The only thing that isn't your separate property is the amount you spent on the house, or any refund you got due to the inheritance.

However, I will add something else. Obviously there was no refund due to your inheritance...there was interest income, and even with today's interest rates on basic savings accounts it was somewhat significant. That means that your joint tax return either owed tax, or had a reduction in refund due to your inheritance. The difference between what you would have recieved as a refund (or would have owed) might be a marital issue.

[teresarae]

Oh good that's what I wanted to hear. someone said if my spouse has paid taxes on it then it is marital property and i about freaked out. If we had to pay taxes one year then it is still the difference of the taxes without the inheritance right?