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Inherited money that is left separately to you is not marital property. If you by a home and hold it in your name, it will not be marital property. HOWEVER, if you live in the home with your wife, it will likely become marital property.
This applies even if you hold title.
One thing you could consider is a trust for the benefit of you and your heirs. Then you and your wife can pay rent to the trust, which would cover your operating expenses and taxes. You can have a lease between you and the trust. This might not be bullet proof, but it would help, since the property will be out of your name. A judge can go around the whole thing if he wants to, but that will take some effort. If you went this route, there would be some additional expenses too, like an extra tax return.
If you think there is a divorce possible in the future, then you might want to consider an investment that you and your wife cannot use together, like gold or something like that. The issue is that any asset that you get in an inheritance in Alabama that is "commingled" will be pulled into the marital estate.
So I would be better off getting a mortgage on the home and putting the money back in the account that it was taken from that's in my name only, right?
Yes. If you use the money you inherited to pay the mortgage, it could bet pulled in. Not clear if that would definitely happen, but it is a risk. They can try to get it, but they might not succeed.
Definitely better than both of you living in the house you paid for with the cash. That would be trouble.
So the money I've inherited wouldn't have to be split so long as I keep it in a seperate account?
Yes. I advocate getting it out of your name. A trust is an easy way to do it. All you need is a trust agreement and taxpayer identification number. That will keep it separate as time goes by. The issue is commingling. Plus, if there is a divorce, you will not have to put it down on your financial affidavit. They have to make the case and you wil say it is inherited and "separate property".
Well, I have a daughter and grandson and my concern is them. I believe that my inheritance should be passed down to them and not to him seeing as we've only been married 9 years..
I've already purchased the home so if I get a mortgage loan on it and deposit the proceeds into my account only, then if we should divorce, we'd only have to divide the equity, right?
Are you living in the home now? That can be handled. I like your idea, get the equity out and put it in a trust for your daughter and grandson with you as trustee. Then you will be protected. If you need the money to pay the loan, then you can be a beneficiary too. You haven't been in the house too long, so the commingling should not be a big deal. Main thing is that the house will not be in your name.
No, I closed at the end of January but due to updates to the home, we haven't moved into it yet....Just had a huge blow up so I just needed information to see that my assets were protected..
Understood. You are thinking smartly. you should get that money into a trust for the kids, via a mortgage, if you can.
Well if I was really smart, I should have gotten a mortgage to start with...Thank you very much...
No one is perfect, that is why there are erasers on pencils. You have time to fix it, which is what counts.
I like the analogy, thanks for your time..
You are welcome. Good luck!
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