How Inheritance Works in High-Net-Worth Divorces in Atlanta

Inheritance can become a major issue during high-net-worth divorces in Atlanta. High-net-worth individuals are highly likely to receive substantial inheritance during their life, and this can help fuel ambitious family goals. A spouse might use their inheritance to purchase a family home or invest heavily in the stock market. Some might receive regular disbursements from family trusts instead of lump-sum inheritance. How should spouses handle this inheritance during a high-net-worth divorce?

Inheritance Is “Separate Property” in Georgia

Georgia classifies inheritance as “separate property” during divorce. In other words, you do not need to divide your inheritance with your ex during divorce. This property is kept separate from the equitable distribution process, which only applies to “marital property” (things you acquired during marriage). Even if you received your inheritance during your marriage, you do not need to divide it with your ex.

What if Inheritance Becomes “Commingled?”

While you can keep 100% of your inheritance during a divorce, you might encounter notable issues if these assets are mixed up in “commingled property.” Commingled assets contain both marital and separate property, and they are extremely common in high-net-worth divorces. They are also difficult to address during the property division process for obvious reasons.

When might your inheritance become “commingled?” An obvious example involves a spouse using their inheritance to pay the down payment on a family home. The other spouse might also contribute their own separate property to the down payment. During the marriage itself, both spouses might use their paychecks (marital property) to pay the mortgage each month. After 10 or 20 years, they are left with a commingled asset containing considerable marital and separate property.

How do you calculate the value of the initial inheritance based on the rising value of the property? How do you “extract” the inheritance from the home? These are problems that many high-net-worth spouses have to contend with, and the solutions aren’t always clear. Alternative dispute resolution (ADR) could provide a pathway toward flexible, creative deals in this scenario.

How Does Inheritance Affect Support?

Inheritance may also affect support. The general logic is that if one spouse earned more than the other during the marriage, they should pay alimony and child support. But what if the receiving spouse received a considerable inheritance during the marriage? Does this outweigh the income of the higher-earning spouse? Does the spouse who inherited these funds really deserve to receive alimony and child support? These are questions that can be difficult to resolve during a high-net-worth divorce in Atlanta.

Can a Family Law Attorney Help With High-Net-Worth Divorce in Atlanta?

A family law attorney in Atlanta may be able to assist with various aspects of high-net-worth divorce, including inheritance. Inheritance has the power to affect almost every part of divorce, including child custody, child support, alimony, and property division. If you have inherited considerable assets from your family members at any point during your life, it makes sense to protect them at all costs. Consider speaking with Buckhead Family Law to discuss an action plan.

Source:

 georgia.gov/file-divorce