A relative may leave an inheritance only to you. Over time, however, it can become harder to tell which assets came from that inheritance if you put the funds in a joint account or used them for a large purchase.
Under Maryland law, an inheritance from a third party generally stays outside marital property. Keeping inherited assets separate and being able to show their source can affect how the court treats them during divorce.
What Maryland treats as nonmarital property
Marital property generally covers assets that either spouse acquired during the marriage. An inheritance left specifically to you usually falls outside that category under Maryland law.
Receiving the inheritance while you are married does not change that rule. If you use inherited assets to buy something else, that new asset may also remain nonmarital if you can show where the funds came from.
An important exception can apply if you use inherited funds toward a home that you and your spouse own as tenants by the entirety. Maryland generally treats that real estate as marital property unless a valid agreement says otherwise.
Why tracing inherited assets matters
Tracing means showing what happened to inherited funds or property after you received them. The court may review account statements, transfer records and purchase records to distinguish inherited funds from assets acquired during the marriage.
An account can still contain nonmarital funds after you mix inherited and marital assets. If the records show where the inherited funds went, the court may treat that portion as nonmarital. If you can no longer trace those funds, you may have difficulty showing that part of the account remains nonmarital. One asset can also have both marital and nonmarital portions when both sources helped pay for it.
Understand where the inheritance fits
An inheritance can become a major issue during property division, especially when it represents a large share of your assets. You may want to review how Maryland treats inherited property before discussing a settlement. Understanding how Maryland treats those assets can help you identify the property issues you may face during divorce.