Would inherited house be a marital asset?

[Mantaray67]

New Jersey

My wife and I live in a house that my parents bought for us, but they still owned it. We have lived in this house for 8 years. My dad has already passed away. Right now my mom isn’t too so well health wise. Her current will is set up so I will inherit the house as well as all his other assets.

My wife and I don’t have any current plans to divorce, but I honestly don’t have high hopes for our marriage. So if/when divorce were ever to happen I don’t want her getting the house. I’ve heard that inheritance is considered separate in divorces, but if it’s comingled can be considered a marital asset. Once I were to inherit the house would living in it together for all this time make it a marital asset? Or does the time previous to inheriting not count? Is there a certain amount of years afterward it would take to become a marital asset?

 

[LdiJ]

New Jersey

My wife and I live in a house that my parents bought for us, but they still owned it. We have lived in this house for 8 years. My dad has already passed away. Right now my mom isn’t too so well health wise. Her current will is set up so I will inherit the house as well as all his other assets.

My wife and I don’t have any current plans to divorce, but I honestly don’t have high hopes for our marriage. So if/when divorce were ever to happen I don’t want her getting the house. I’ve heard that inheritance is considered separate in divorces, but if it’s comingled can be considered a marital asset. Once I were to inherit the house would living in it together for all this time make it a marital asset? Or does the time previous to inheriting not count? Is there a certain amount of years afterward it would take to become a marital asset?

Just living in it would not make it a marital asset. However, any appreciation of the house over the years of your marriage could become a marital asset if you spend any marital money on the house. So, if you spend marital money on insurance, upkeep and taxes then it could become partially a marital asset.

 

[Mantaray67]

So does that mean it would automatically be half hers once I inherit since we have already paid for the insurance and maintenance from our shared account?

 

[adjusterjack]

No, not "automatically" nor would she have any "ownership" interest in the house as it would be your sole and separate property.

She would have a "financial interest" in part of the equity that accrues during the marriage and not necessarily half. Could be less, could be more depending on what is "equitable" according to NJ law.

Could mean you end up paying her cash or some other offset to avoid having to sell the house.

Google "property division New Jersey divorce."

If your marital future is in doubt, consider getting divorced while your mother is still alive.

 

[AlmostThere]

You should speak with two attornies:
1) An estate attorney on how to best handle this potential inheritance in case of divorce. Or conversely, your mom may be able to change her will so that the asset does not go directly to you.
2) A divorce attorney. If you are worrying about divorce, the may be more to worry about than the value of a house you will potentially inherit.

 

[zddoodah]

My dad has already passed away.

I'll assume that, when your father died, your mother inherited his entire estate.

I’ve heard that inheritance is considered separate in divorces, but if it’s comingled can be considered a marital asset.

You can't commingle a house. That said, you're correct. Section 2a-34-23(h) of the New Jersey Statutes provides that, in a divorce, a court may, generally, "make such award or awards to the parties, in addition to alimony and maintenance, to effectuate an equitable distribution of the property, both real and personal, which was legally and beneficially acquired by them or either of them during the marriage or civil union.  However, all such property, real, personal or otherwise, legally or beneficially acquired during the marriage or civil union by either party by way of gift, devise, or intestate succession shall not be subject to equitable distribution."

Once I were to inherit the house would living in it together for all this time make it a marital asset? Or does the time previous to inheriting not count?

No and no.

That said, it's possible that your wife could acquire a marital interest in the home. If your mother shares your concerns, it might be wise for her to put the house into a trust that is carefully written to make sure that the house doesn't come into play in connection with any divorce.

 

[Taxing Matters]

I agree that it is possible that she could get some marital interest in the home if you are not careful to keep it separate once you receive it from the state. Generally, though, she would only get a share of the appreciation in value from when you inherit it and when the divorce is filed (if you go that route). None of the value of the house that existed at the time your mother died should be considered a marital interest. Consult a local family law attorney to ensure you don't do anything that would give her a marital interest in any future appreciation. zddoodah's idea of your mother putting the house into a trust at her death is one good way to accomplish that, but not the only one. You'll want to figure out what approach will work best for you.