Do you have to share property you inherited with your ex-spouse?

On Behalf of | Nov 25, 2023 | Family Law |

In North Carolina, the question of whether one must share inherited property with a spouse is a matter of significance. The state’s legal framework operates under the principle of equitable distribution, a concept that aims to fairly divide marital assets between divorcing parties.

However, the treatment of inherited property introduces a layer of complexity to this process.

Equitable distribution in North Carolina

North Carolina follows equitable distribution, which does not necessarily entail an equal 50-50 split of marital assets. Instead, the court tries to divide property in a fair and just manner, considering various factors such as each party’s financial contribution, earning capacity and overall financial situation.

The treatment of inherited property

The median value of an owner-occupied house in North Carolina is $197,500, which can cause friction during splits. However, inherited property is typically separate, rather than marital. This means that a house or other property you acquire through inheritance is generally not subject to division. There are exceptions to this rule, though.

Commingling of inherited assets

One scenario where inherited property may become subject to division is through commingling. Suppose you mix inherited funds or assets with marital assets. The court might consider the commingled assets as marital property. They would be subject to equitable distribution.

Active contribution to inherited property

Another exception arises when a spouse actively contributes to the preservation, improvement or appreciation of inherited property. In such cases, the court may recognize the spouse’s efforts and could potentially award a share of the appreciated value.

While North Carolina generally respects the separate nature of inherited property in divorce proceedings, nuances exist. It is necessary for individuals navigating divorce to be aware of these complexities within the context of equitable distribution.