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According to Ohio Revised Code Section 3105.171, the court follows an equitable distribution model. That means all marital property, including retirement accounts and income, is subject to division during a divorce. This might not always result in a 50/50 split like in most community property states.
Those who wish to pass down an inheritance to their children or those who received a sum from their parents might worry that it will all be taken away by a former spouse. While this is a reasonable thing to fear, how the court divides your assets depends on the specifics of your case. There are various ways to ensure an inheritance is protected.
Ohio Revised Code Section 3105.171 (i) says the court labels an inheritance as separate property. However, the reality is that most couples don’t keep all their money separate.
Your inheritance could turn into marital property in some situations. For example, many spouses have a joint bank account to manage finances. And while this may simplify things in a healthy marriage, it creates chaos during a divorce.
Once you deposit your inheritance into a joint bank account, it becomes marital property and therefore is subject to division. This is sometimes called “commingling accounts.”
The best way to safeguard an inheritance during a divorce is through a revocable trust, prenuptial agreement, or separate accounts.
A revocable trust allows you to keep an inheritance as separate property by placing all assets in the beneficiary’s name only. That way, your beneficiary receives everything you intended to give them.
Another way to protect an inheritance is to create a prenuptial agreement before marriage. This outlines what assets go where and allows for a smoother divorce. You could clearly state that you and your spouse decided for you to keep your inheritance in the event of a divorce.
If you received an inheritance from your parents or other relatives, and it wasn’t placed in a trust, you must keep this property in a separate account to protect it. Remember, once you transfer it into a joint account, it also becomes your spouse’s inheritance.
You should also consider how your divorce impacts your overall estate plan. Once your divorce is finalized, you should update your will with new beneficiaries so that your property ends up in the right hands.
Fortunately, Ohio law treats the former spouse outlined in your will as if they died before you created the will. Ohio Revised Code Section 2107.33 (B) states that any property you named to go to your spouse will pass to your other heirs.
Further, you might have designated your ex as your power of attorney, the guardian of your children, the executor of your estate, or any other appointments. Divorce effectively terminates any designations to your former spouse.
With these appointments being terminated, you can decide who will take your former spouse’s place to ensure your last wishes are granted.
Asset distribution can make even the most civil divorces ugly, especially in high-asset situations. Your spouse might be entitled to your inheritance if you don’t protect it. Any assets you wish to pass on could be vulnerable if they divorce their spouse.
At Erb Legal, our team can keep you informed and help ensure that your estate ends up in the right hands – not your ex’s. We’ll handle all the paperwork and fight for the best possible outcome in your case.