You Be The Lawyer: Can She Lose The Inheritance?

11 Nov 2022 · 1 min

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In this solo legal‑explainer video, Jerry Taylor presents a hypothetical scenario: parents leave $400,000 to their only daughter, who deposits the entire inheritance into a joint bank account with her husband. A year later the couple divorces. Taylor explains that whether the husband can claim part of the inheritance depends on state law. He outlines the general rule that inheritances are treated as separate property, but warns that commingling the inheritance with joint funds—especially using the account to pay household bills—can convert it into marital property and expose it to division in divorce. He advises that the daughter should have kept the inheritance in a sole‑name account, though even that may not fully eliminate risk in some jurisdictions. The strongest protection, he notes, would be to place the inheritance in an irrevocable trust set up by the parents, which would keep the assets out of the marital estate entirely. The video ends by prompting viewers to comment with their answers.

Chapters

It's time again to test your legal skills. So you be the lawyer. I'll give you the facts, you apply the law. Mom and Dad work hard their entire lives. They build up an estate of $400,000. They leave their estate to their only daughter. Their daughter is married and puts the entire inheritance into a joint bank account with her husband. One year later, she and her husband decide to divorce. Can the husband get part of her inheritance? Stop the video right here and put your answer in the comments. And the answer is, it depends. Most states treat inheritances as separate property. In circumstances where an inheritance, which is separate property, is commingled with joint property, there could definitely be a bad outcome and often is. If this money were put into an account out of which bills were being paid, that's a problem. So what's the answer? At a very minimum, she should have put this money into a separate account with only her name on it, but that would not completely avoid the risk. Some states have very clear-cut laws on this. Best option would have been for the parents to put this money into an irrevocable trust. If that had been done, the money would have been protected.