Why Your Child’s Divorce May Cause Inheritance Problems
It is probably a pretty safe bet that, should your child get divorced, you would not want your
child’s former spouse to receive anything from the estate that you spent a lifetime building.
Because the divorce rate is so high these days, this type of scenario has become somewhat
problematic for estate planning attorneys. How do you structure an estate plan so that your
former son-in-law or daughter-in-law won’t get their hands on your son or daughter’s share of
your estate? Why is this even a concern if they are divorced?
This is a valid concern because of the way the law treats property during a marriage. If a married
couple was required to divide up their property into two categories, they would have “marital
property,” which, for the most part, is any property acquired by either spouse during the
marriage, and “separate property,” which is property that a spouse owned prior to the marriage or
that was acquired by inheritance during the marriage.
These property designations are important because, upon divorce, marital property gets split right
down the middle, with each receiving one-half, but separate property has a different result. It
remains the property of the spouses but, if the property (i.e., the inheritance) is acquired during
the marriage, any appreciation in value is subject to division.
In other words, the inheritance still belongs to your child, but if it increases in value during the
marriage, then that increase is considered to be marital property and will be divided equitably.
Experienced estate planning attorneys Greensboro NC of the Law Offices of Cheryl David offers
estate planning and business planning resources to residents of Greensboro NC. To learn more
about these free resources, please visit http://www.cheryldavid.com today.