Protecting Inherited Wealth In A Maryland Divorce

When couples in Maryland go through a divorce, one of the most emotionally and financially sensitive concerns is how property and assets will be divided. For those of us who have received an inheritance, either before or during the marriage, this concern becomes even more pronounced. Inherited wealth often carries personal significance, family history, and long-term financial planning. It is not just about dollars and cents; it can be about preserving a family legacy. As divorce attorneys serving Montgomery County, Maryland, we are frequently asked whether inherited property is subject to division during divorce proceedings, and what steps can be taken to help keep that property separate.

Maryland law draws a distinction between marital property and non-marital property. Inheritances, by their very nature, are initially classified as non-marital property, which means they generally do not have to be shared with a spouse during divorce. However, that protection is not automatic. Inherited wealth can become subject to division if it is commingled with marital property or used in a way that transforms its legal classification. That is where many people unknowingly place their inheritance at risk.

We work closely with our clients to understand the nature of their inherited wealth and to determine how it has been handled during the marriage. This analysis can involve reviewing how accounts were titled, how funds were used, and whether the inheritance was ever blended with joint marital property. While each case is unique, what is consistent is the importance of acting early and being proactive. If you are concerned about inherited wealth and how it may be treated in a Maryland divorce, the way it was managed during your marriage may have a lasting impact.

What Counts As Inherited Wealth Under Maryland Law

Inherited wealth includes money, property, real estate, personal heirlooms, investments, and other assets received from a deceased family member or loved one. Under Maryland Family Law § 8-201, property acquired by inheritance is classified as non-marital property, meaning it is not subject to equitable distribution during divorce. That’s an important protection, but it can easily be lost through improper management.

If you received an inheritance and deposited those funds into a joint checking account or used the money to improve a marital home, that asset may be considered “commingled.” Once the court determines that the inherited property has been used in a way that blends it with marital assets, it can lose its non-marital status. That means your spouse may have a claim to part of it in divorce proceedings. The more time passes without proper documentation or separation of the funds, the harder it becomes to argue that the asset is solely yours.

We encourage our clients to maintain separate accounts for inherited funds and to avoid using that money for joint expenses or investments. In cases where a home was purchased or renovated using inherited wealth, documentation is key. We work to present evidence that demonstrates the source of the funds and preserves the classification as non-marital property whenever possible.

Commingling And Transmutation: How Inheritance Can Lose Protection

One of the most common pitfalls we see is the unintentional transformation of inherited property into marital property through a process known as commingling. For example, if you inherited $100,000 and deposited that money into a joint bank account that you share with your spouse, and both of you used those funds to pay bills or make purchases, the entire account may be subject to division.

Another scenario involves using inherited funds to make improvements to the family home, such as renovating the kitchen or adding a new roof. Even if you can trace the funds back to an inheritance, the fact that the money was used to improve a marital asset can lead a court to find that the funds were gifted to the marriage. That’s called transmutation, and it can be extremely difficult to reverse without documentation showing clear intent to keep the property separate.

When clients come to us before or during divorce proceedings, we conduct a detailed review of the financial records, account statements, and other documents to determine whether inherited assets have been commingled. If so, we look for ways to argue that the original intent was to keep the inheritance separate, but this must be supported by clear evidence.

Keeping Inherited Wealth Separate

To maintain the classification of inherited assets as non-marital property under Maryland law, we always advise clients to take several key steps. First, keep all inherited funds in a separate account titled only in your name. Do not deposit the money into joint accounts or use it to pay for shared household expenses. Second, clear records should be maintained showing how and when the inheritance was received. Keep letters from the estate administrator, copies of checks, deposit records, and any other relevant documentation.

If the inheritance includes physical property, such as a home or valuable heirlooms, avoid using those items in a shared marital context. For example, if you inherit a vacation property, do not title it in both spouses’ names or use marital funds to renovate it unless you are prepared to risk it being reclassified as marital property.

For our clients who are considering marriage or are already married and concerned about future claims, a prenuptial or postnuptial agreement can be an effective tool. Such agreements can clarify how inherited assets will be treated in the event of a divorce, offering peace of mind and legal clarity. We help draft these agreements in a way that reflects your intent and complies with Maryland law.

Inherited Wealth And Gifts During The Marriage

Some clients also ask whether gifts from family members during the marriage are treated the same as inheritances. While Maryland law does provide protection for gifts that are clearly intended for one spouse only, the same principles of commingling and transmutation apply. For instance, if your parents gave you a large monetary gift during the marriage, and that gift was deposited into a joint account, it could be considered marital property unless you can prove otherwise.

As attorneys who work with high-income and asset-sensitive divorces, we know the importance of addressing gifts and inheritances early in the process. That’s why we focus on identifying all separate properties, tracing their origins, and helping clients assert their legal position before any distribution decisions are made.

Why Timing And Strategy Matter

The sooner you take steps to protect your inherited property, the better. If you are already considering divorce or your spouse has filed, you should consult with us immediately to review your options. The handling of financial assets is one of the most scrutinized parts of any divorce proceeding, and mistakes made early on can cost you later.

Even if you are not sure whether your inherited wealth has been commingled, we can help you understand the implications under Maryland’s property classification laws. Each case requires careful strategy, supported by financial documentation and legal planning. That’s what we focus on when guiding our clients through complex asset matters.

Frequently Asked Questions About Inherited Wealth In A Maryland Divorce

Can My Spouse Claim Part Of My Inheritance In A Divorce?

Inherited property is generally considered non-marital property under Maryland law, which means your spouse is not entitled to a share of it. However, if you combined that inheritance with marital assets, such as depositing it into a joint account or using it to renovate a jointly owned home, it may become marital property. In that case, your spouse could make a claim to it during divorce proceedings. We review these circumstances carefully and work to separate what can be preserved as non-marital property, even if some mixing has occurred.

What If I Used My Inheritance To Pay Off A Joint Debt Or Mortgage?

If you used your inheritance to pay off a joint debt, mortgage, or other shared financial obligation, the court may see that as a contribution to the marital estate. This could result in the inheritance losing its non-marital protection. We examine how the funds were used and whether any of them can be traced and reclaimed as separate property. The key is documentation—if you can show that you intended to preserve the inheritance as separate, that may strengthen your position.

Does Putting My Inherited Money Into A Joint Account Make It Marital Property?

Yes, depositing inherited money into a joint account is one of the most common ways that separate property becomes marital property. This is referred to as commingling. Once the funds are mixed with marital assets and used by both spouses, it becomes difficult to claim that they should remain separate. We always advise clients to keep inherited money in an individual account and to avoid using those funds for any joint purpose if they wish to preserve its separate status.

Can A Prenuptial Agreement Protect My Inheritance?

Yes, a prenuptial agreement can be an effective way to protect an inheritance in the event of a divorce. Such agreements allow both spouses to agree in advance on how property, including inherited assets, will be handled. In Maryland, prenuptial agreements are enforceable as long as they are entered into voluntarily and with full disclosure of each party’s financial situation. If you are already married, a postnuptial agreement can offer similar protections. We help draft these agreements to ensure they comply with Maryland law and reflect your intentions clearly.

What Should I Do If I Inherited Property Before The Marriage?

If you inherited property before your marriage and kept it entirely separate, meaning you did not use it for marital purposes, retitle it jointly, or commingle it with other assets, it will likely be treated as non-marital property. However, if you later used the inherited funds for joint purposes, such as home renovations or family investments, the court may find that some or all of the value was contributed to the marriage. We help clients trace the origin of those assets and argue for their exclusion from marital property when appropriate.

Call Shah & Kishore To Protect What’s Rightfully Yours

At Shah & Kishore, we understand that protecting your financial future is a top priority. If you have inherited wealth or expect to receive an inheritance, it is critical to understand how Maryland divorce law may affect those assets. From our office in Rockville, we represent clients throughout Montgomery County and offer thoughtful, detailed strategies for preserving non-marital property.

Whether you are considering divorce or already in the process, we invite you to schedule a free consultation with our team. We are here to listen, evaluate your situation, and help you move forward with clarity and confidence. Contact our Maryland divorce attorney at (301) 315-0001 to schedule your free consultation and to protect your financial security.