This is a question we often hear in a divorce action. Inherited and gifted monies are exempt from division in a divorce in Wisconsin. If you have kept these funds separate, in your own name, there is a high probability that you will be able to keep any gifts or inheritances in a divorce. Sometimes, the court can divide these funds in unusual circumstances for “equitable reasons” but that is a fairly rare occurrence.
However, disputes arise when inherited or gifted funds have been “co-mingled” into a marital asset. For example, if the funds were deposited into a joint account or were used to purchase a marital home. In these situations, the nature of the funds have been transmuted into a marital asset. Often, the individual receiving the inheritance or gift wants those funds back at the time of the divorce. The current state of the law on this topic is that there must be “donative intent” on the part of the spouse who received the inheritance. In other words, is there sufficient evidence that the spouse intended to give his or her inheritance to the marriage or to the other spouse?
This inquiry is very fact specific. The court would look at the details of the marriage and the actions of both parties to make this determination. In reality, however, family court is a court of equity and strives to arrive at a result that is fair and equitable to both parties. Depending on when the inheritance was received and where the funds were spent or deposited, the court will sometimes give credit for co-mingled inherited or gifted funds.
For further details, please see our website or contact us for a free initial office consultation.
–Teri M Nelson