**Understanding Inheritance and Divorce in Minnesota

Receiving an inheritance during your marriage can prompt essential considerations regarding its classification as either separate or marital property in the event of a divorce. In Minnesota, inheritances are primarily viewed as separate property belonging solely to the inheriting spouse. However, nuances within the law can sometimes transform this inheritance into marital property subject to division.

### Separate vs. Marital Property in Minnesota

In Minnesota, marital property encompasses assets and debts accumulated during the marriage by either spouse, alongside income earned. The equitable division of marital property does not automatically imply a 50/50 split; rather, courts assess contributions made by each spouse and other relevant factors to determine an equitable distribution.

#### Marital Property Includes:
- Assets and debts acquired during the marriage.
- Any income earned during the marriage.
- Increases in the value of non-marital property due to active efforts during the marriage.
- Property obtained after the valuation date but prior to the divorce decree.

#### Separate Property Includes:
- Assets owned prior to the marriage.
- Inheritances received by one spouse from third parties.
- Gifts given to one spouse during the marriage.
- Personal injury awards accrued by one spouse during the marriage.
- Increases in the value of non-marital property (passive appreciation).
- Property explicitly excluded by valid prenuptial or postnuptial agreements.

As a rule, any inheritance received by an individual spouse is classified as separate property and should remain out of the marital property pool upon divorce. Still, exceptions exist that can change this designation.

### When Can Inheritance Become Marital Property?

One significant factor is the commingling of inheritance with marital assets. For instance, if inherited funds are deposited into a joint account where marital earnings are also mixed, it may blur the lines separating marital and non-marital property. This commingling risks altering the inheritance's status, making it potentially subject to division.

While utilizing non-marital inheritance for purchases during the marriage typically does not equate to commingling—given that assets can be tracked back to their non-marital foundations—it’s crucial to maintain clarity. Keeping records that clearly indicate the origins of these funds can be beneficial.

Transmutation is another risk where separate inheritance intentionally becomes marital property. This process requires both written agreements from the inheriting spouse to gift their separate property to the marital estate and specific actions such as changing titles from one spouse's name to both spouses’ names.

### Strategies to Protect Your Inheritance

1. **Maintain Separation**: Keep inherited assets completely distinct from jointly owned marital property. Avoid commingling by steering clear of joint accounts containing inherited funds.

2. **Document Thoroughly**: If you accidentally commingle funds, keep meticulous records tracing your inherited assets. Retain bank statements and documentation to substantiate the sources of deposits and withdrawals.

3. **Refrain from Transmutation**: Do not sign agreements that suggest gifting your inheritance into the marital estate.

4. **Avoid Gifting**: Refrain from gifting any part of the inheritance to your spouse or altering title deeds to include your spouse's name.

To navigate these complexities and safeguard your financial future, consider scheduling a case review with our experienced legal team. We are dedicated to providing compassionate counsel and robust advocacy to ensure your best interests remain protected.

**Contact Us Today**
Call us at (952) 442-7722 to discuss how we can assist you in understanding and protecting your inheritance rights in the context of divorce.