Question for married people who have received an inheritance

[disneysteve]

If you are married and have ever received an inheritance, did you keep that money separate in your own name or did you co-mingle it with your spouse in joint accounts?

I know the standard advice is to keep inherited money separate because legally it belongs to the individual who inherited it. Once you co-mingle it, however, all bets are off and it becomes part of marital assets.

My wife and I have been happily married for almost 29 years. We have always kept all money joint except for retirement accounts which have to be individual. Otherwise, everything is shared equally. I expect to inherit a significant amount within a year so this question came to mind. Should I keep it separated in my name only (with my wife as beneficiary, of course)? It wouldn't change anything about how we use that money. I already consider each of our retirement accounts to effectively be joint money. I would still use the money for both of our benefits going forward. She would still get it all if I were to die before her. But in the unlikely event that she decided to run off with her personal trainer or the lawn guy, that inheritance wouldn't have to be split with her. At least that's my understanding.

I'm just curious how you have handled it if you've been in that situation.

[HundredK]

We've been married 20 years and co-mingled my husband's inheritance. We share everything 50/50, and I know that should we ever part ways it would be very amicable and we'd split it all 50/50 anyway, even if one of us did something heinous (which we do not expect to happen obvs). But that's just who we are. I think each person has to come to their own terms about the state of their relationship with their spouse and make decisions accordingly. Also quite a bit different if there are kids from other spouses in the picture, I imagine.

[disneysteve]

We've been married 20 years and co-mingled my husband's inheritance. We share everything 50/50, and I know that should we ever part ways it would be very amicable and we'd split it all 50/50 anyway, even if one of us did something heinous (which we do not expect to happen obvs). But that's just who we are. I think each person has to come to their own terms about the state of their relationship with their spouse and make decisions accordingly. Also quite a bit different if there are kids from other spouses in the picture, I imagine.

Good point about kids, but that's not an issue for us. Just our one jointly-produced child.

My instinct is to treat this money just like all of our other money - share and share alike. It's worked for 29 years. I just figured it might be an interesting question.

[kork13]

I haven't received an inheritance, and we've only been married for ~7 years... but whenever I eventually do receive an inheritance, I fully expect it'll end up fully in joint control with my wife.

Though I will say that rather than thinking of our assets (or anything else) as a 50/50 split, I see marriage more as a 100/100 sharing of everything that both of you have -- financially, emotionally, physically, socially, and otherwise.... Sometimes that's difficult to define (let alone apply), but I view the difference as important.

[rennigade]

Neither of us have received an inheritance but if my wife did, I would encourage her to keep it in her account. She would use it for us either way, but if her family wanted her to have it, she should have it.

But, we are both in a unique situation for our age where we both have money and neither spend friviously. I'm guessing if one or the other had very little saved or didn't work, it would be a different story.

[bjl584]

I am an only child, so I will have an inheritance from both my mom and dad (they are divorced)
I'm not married, so all things being equal, I will receive it alone.
Not sue how it is all invested, so I have no plans on what I will do with it, the amounts involved, or how I will handle it

I have a pretty good guess as to the amounts.
My mom's estate was worth a little north of a half million when I looked at it about a decade ago.
I can only speculate that it has grown since then though, since it is still invested, and she hasn't touched it.

My dad is a wildcard.

[disneysteve]

Not sue how it is all invested, so I have no plans on what I will do with it, the amounts involved, or how I will handle it

This is a different issue than what I was asking about, but since you brought it up.

I know the amounts involved in the inheritance I'll receive. I don't know how all of it is invested. About 40% will be from selling the house, so that'll be cash. About 10% will be from selling the cars, so that'll be cash too. 16% is in two individual stocks not in retirement accounts. So that's about 66% of the total. The other third is in retirement accounts, traditional IRA and Roth. I know where they are but I don't know how they are invested. I'll figure that out when the time comes.

[Snicks]

I inherited an IRA from my mom as the beneficiary. And, just left that in my name however my spouse is named as the beneficiary. We have accounts that have his name only, my name only and some in both names. We are not concerned about co-mingling, as there is no His/her money it's all just ours. So the reasons that there are some with one name only just evolved mostly out of ease of use. My Roth is in my name. His is his name, etc. So, we are either beneficiaries or in some cases you can have someone be able to sign and have access to your account information without his/her name on it per se.

[Snicks]

Some of this depends on your state laws. Even if you inherit in your name only, if you are married, that may still be counted as marital assets anyway. I mean, that is a question for a lawyer but I think if you are married and inherit that is marital property mostly. But, I dont' really know the particulars on that.

[disneysteve]

I think if you are married and inherit that is marital property mostly.

Just the opposite. Most places, if not all, inherited money belongs to the beneficiary even if married, as long as it is kept separate in that person's name only.

[disneysteve]

The inherited IRAs will be in my name only since that's the only way to do that (with DW as beneficiary of course). It's just the cash that I'll need to decide where to put.

[Fishindude77]

Only thing I ever inherited was a few acres of ground. It's a joint asset with my spouse, I see no reason to keep things separate.

[sblatner]

My husband has received three inheritances over the years (not a ton of money but it certainly has helped us over the years). The first after eight years of marriage. I don't think he ever thought about keeping it separate. Now after 30 years of marriage, my parents are 85 and have some assets. I have always told myself that if we split up, he will have a choice of getting his inheritance back or taking half of what I get from my parents. Finances are our thing so we have very good records. I feel like I am a totally fair person and even if he cheated, I would still do it.

[LivingAlmostLarge]

Interestingly I guess I'm an outlier. We are a "joint" together couple having been together 21 years. We've been together since we built everything we have. But as our parents age we are in a slightly weird position of them actually having money. We haven't been helped I guess because they are very conservative and worry about running out. I think they might both be okay but it's not something spoken off. My suspicion is they are both very okay.

That being said I know both our moms prefer we keep our inheritances separate. It's why when DH got $ from his uncle as executor of the estate (no choice and not worth what he got) we put it into accounts for our kids so as to not anger his parents. If he had kept it joint they were already pissed he didn't give them the money. And I wasn't keen on giving them the money. I was okay with him keeping it in his name though it wasn't inherited it was "earned" and boy did he earn it. But they were just angry with us so I suggested he put it in the girls accounts split because I know his uncle would have been thrilled. So he stood tough and said it's for the kids.

My mom actually likes my husband but being divorced she believes it always can happen. So she will not leave me anything and is leaving it for my kids. So I'm guessing that will influence if we even get anything.

[moneybags]

I think in your case, you would opt to do it to protect the funds for your daughter. If you die & your wife remarries (without a pre-nup), the inherited money could be spent by her new husband, and your daughter could end up with nothing.