How to Protect Your Inheritance from a Spouse in Kentucky
You received an inheritance — money, property, or other assets left to you by a parent, grandparent, or other loved one. Now you want to make sure those assets remain yours, even if your marriage ends in divorce. Kentucky law provides protections for inherited property, but those protections can be lost if you are not careful about how you handle the assets.
Inherited Property Is Non-Marital in Kentucky
Under KRS 403.190(2), property acquired by one spouse through gift, bequest, devise, or descent (i.e., inheritance) is classified as non-marital property and is not subject to division in a divorce. This means that if you inherited $100,000 from your mother, that money is yours alone — your spouse has no claim to it in a divorce, as long as it retains its non-marital character.
This protection is automatic under the statute. You do not need a prenuptial agreement or any special legal arrangement for inherited property to be classified as non-marital. The challenge is maintaining that classification throughout your marriage.
How Inherited Property Loses Its Protection
The most common way inherited property loses its non-marital character is through commingling — mixing inherited assets with marital assets to the point where they can no longer be separately identified.
Commingling with joint accounts: If you deposit your inheritance into a joint bank account with your spouse, the funds become commingled with marital assets. Over time, as deposits and withdrawals occur, it becomes impossible to trace which dollars are the inheritance and which are marital. Courts may treat the entire account as marital property, or at a minimum, the burden falls on you to trace and prove which portion is non-marital — a process called tracing.
Using inheritance for marital purposes: If you use your inheritance to pay the mortgage on the marital home, renovate the jointly owned house, or fund a joint investment, you may be treated as having made a gift of those funds to the marriage. Courts look at the intent of the spouse who owned the non-marital property — if you voluntarily used the inheritance for the benefit of both spouses, the court may find that you transmuted the non-marital property into marital property.
Titling in joint names: If you retitle inherited real estate from your name alone to joint names with your spouse, you have likely converted non-marital property to marital property. Similarly, if you use inherited funds to purchase property titled jointly, the character of the asset may change.
How to Protect Your Inheritance
The key to protecting your inheritance is keeping it separate and identifiable.
Maintain a separate account: Keep inherited funds in a bank or investment account titled solely in your name. Do not deposit marital income into this account, and do not use it for routine household expenses. The account should be funded exclusively with inherited assets and the income or growth generated by those assets.
Document the source: Keep records showing the origin of the inherited assets — the will, trust distribution letter, probate documents, or beneficiary designation. If you ever need to prove that the assets are non-marital, this documentation is essential.
Avoid commingling: Do not mix inherited funds with marital funds. If you need to use some of the inheritance for a marital purpose, understand that those specific funds may lose their non-marital protection. Consider using only the income generated by the inheritance (rather than the principal) if you need to contribute to marital expenses.
Be careful with real estate: If you inherit real property, keep it titled in your name alone. If you and your spouse move into inherited property, be careful about how improvements are funded — marital funds used for improvements may create a marital interest in the non-marital property.
The Tracing Requirement
If commingling has occurred, Kentucky law allows you to trace non-marital contributions to prove that specific assets retain their non-marital character. Tracing requires detailed financial records and often the assistance of a forensic accountant. The spouse claiming non-marital property bears the burden of tracing — if you cannot demonstrate which funds are non-marital, the court may treat the commingled assets as marital property.
Prenuptial and Postnuptial Agreements
A prenuptial agreement (before marriage) or postnuptial agreement (during marriage) can provide additional protection for inherited property. These agreements can expressly confirm that inherited assets are and will remain non-marital, even if commingling occurs. While Kentucky already classifies inherited property as non-marital by statute, a marital agreement adds a layer of certainty and can address specific scenarios — such as using inherited funds for home improvements — that might otherwise create ambiguity.
Plan Ahead
The best time to protect your inheritance is when you receive it — not when a divorce is imminent. Taking simple steps to keep inherited assets separate and documented can save significant expense and uncertainty if your marriage ever ends.
Buckles Law Office handles estate planning and family law matters in Central Kentucky. Call (859) 225-9540 to discuss protecting your inheritance.
