How is inherited property considered in equitable distribution? We have discussed how the process of equitable distribution works in North Carolina in one of our earlier posts but the purpose of this entry is to talk about how an inheritance might be considered during the equitable distribution process and if both spouses are entitled to a division of such an inheritance.
How Does the Court Determine the Classification of Property in Equitable Distribution?
North Carolina courts use the “Source of Funds” rule in determining which assets are separate and which are marital. The source of funds rule allows the court to trace the money which was used to originally acquire the property in order to determine its classification.
How Does the Source of Funds Rule Affect an Inheritance?
In general, an inheritance is considered separateproperty, especially if that property is never commingled with into jointly-owned marital property. This means that the property remains that of the spouse who originally inherited it. If an inheritance was commingled with other marital assets, tracing those funds to their origins in separate property may be difficult.
Must a Court Decide on Equitable Distribution?
The answer is no. A court does not have to decide on how the property is split up. The parties are free to decide on how their property is to be divided by creating aseparation agreement which fairly divides the property. It may be wise to consult an experienced family law attorney in your area for assistance with drafting aseparation agreement.
Consider setting up a consultation with a family law attorney at Gilles Law, PLLC. You can reach us at 980-272-8438 at our office in Uptown Charlotte. We are here to assist with your inquiries.
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