Heading towards an (amicable) divorce but what about my inheritance?

August 24, 2020 2:03 PM

My partner and I have been together for over 20 years and are sadly looking at a divorce in the near future. We have 1 child over 18 and are still friendly with each other, we've tried the counseling route to no avail, my partner has had what could generously be called "an emotional affair" over the last year and so we are officially done. We are at the beginning stages of working through the details of this, and are leaning towards working with a mediator instead of going the divorce lawyer route. (I have read many threads on AskMefi about the wisdom of this, I'm not interested in rehashing this question here. Please assume that this question has been resolved.) I know you all are not lawyers, so anecdotal answers are fine here, the biggest question I have is this: I am an only child with an elderly parent who will (most likely) be leaving me a substantial inheritance when she dies. How might this factor into any division (or future division) of assets?

More background:

• Both of us are in our early 50s and make decent livings (approx 160k after taxes) although I make approximately 25% more than my partner.
• Our retirement savings are probably below average for where we "should be" but have made great improvements there over the last few years

Now for my main question: my parent is in their 70s, lives alone and I am currently the sole heir. The numbers are not exact, but for ease of discussion let's say the parent has $1 million in assets. Again, I know you are not my lawyer, but to what degree is this type of situation typically factored into how our assets would be divided today and how my future assets might be affected down the road (i.e. when I (in theory) receive the inheritance.)

I say "in theory" because there is also a scenario where the inheritance disappears, my parent may live for another 10, 20 years, this is obviously unknown, and these savings may dwindle significantly due to medical reasons, etc. I'm assuming these are the types of questions an experienced mediator is familiar with, but I'm trying to get a sense of the landscape before initiating this conversation, especially from people who have gone through this type of situation in the past or are familiar with the law. (We are based in Massachusetts if this is relevant).

I suppose it's also worth mentioning that my partner has parents in the age 70 range with similar (if not more) assets than my parent, so an inheritance is presumably in the future there as well, although in this situation there are siblings to be considered.

posted by anonymous to Work & Money (17 answers total)

To the best of my knowledge (as someone who grew up in MA and had parents who went through a few divorces there, and who were all part of at least some generational wealth transfer) the answer is "They don't"

That is, future maybe-money isn't really figured in unless it's somehow part of your current life (that is, you are living in your parent-owned house that you would eventually be inheriting or something). Your parents would want to know about your divorce so that if there is language in their wills that includes your soon-to-be-ex they can re-calibrate it as they see fit.

Here's a MA law firms' website explaning the idea of “expectancy interest” in a way that may be useful.
posted by jessamyn at 2:11 PM on August 24, 2020 [7 favorites]

I'm fairly recently divorced and financially similar. My divorce went through mediation rather than court (although we did both hire lawyers and I eventually had to briefly appear in court to attest the results of the mediation). My potential future inheritance never came up except as a factor in me not pushing to get more in the divorce settlement.
posted by LionIndex at 2:23 PM on August 24, 2020 [3 favorites]

Are you asking whether an inheritance can/should or must be split? Already executed inheritances are not usually considered martial property, let alone a future one.

There might be some quirk in the law that I'm not aware of as far as the legal must but as far as the can/should part, unless your partner has been exceptionally helpful (spending every weekend redoing their drywall, taking them to physical therapy twice a week) above and beyond the call of duty, I don't see a reason why they'd need to be included in a future inheritance, especially if they were the one that strayed and caused the relationship to crumble. Inheritances are gifts to people meaningful to the people leaving them; your partner is probably not going to be one of those people any more.
posted by Candleman at 2:27 PM on August 24, 2020 [5 favorites]

No. Your parent's assets, which they may or may not leave to you, and which may or may not be there when they pass in any case, are not going to be considered by the court in your divorce settlement.

Nor should you be considering them in your calculus, presuming you'll get them, etc. Weird stuff happens.

You should let your parent know that you're splitting up, so they can adjust any relevant bequests in their will, just in case they do die before your divorce is final.
posted by fingersandtoes at 2:30 PM on August 24, 2020 [11 favorites]

I'm sorry, I misspoke above. Way to be weird, MA law! Apparently an expectancy interest such as the one you describe CAN be considered by the court as a factor in how an estate is divided in MA! It generally isn't, even in MA, and the interest itself isn't an asset to be divided, but apparently it can, in some cases, be a factor in deciding how to allocate the division of the marital assets.
posted by fingersandtoes at 2:43 PM on August 24, 2020 [3 favorites]

As long as your parent has not made you co-owner on anything (home, property) as a sort of pre-heritance, it shouldn't be relevant (unless your legal advisor says it is). But mostly I just want to second getting that parent to go ahead now and remove your spouse from any beneficiary forms (insurance, bank, pension, property), power of attorney paperwork, will, etc. It's not that these are legally relevant but that these tasks are tedious (10x so in a pandemic) and get put off and you do not want to find years from now that something did not get changed.
posted by Lyn Never at 2:43 PM on August 24, 2020

Ex-divorce laywer (UK) here. Generally, a potential inheritance can be taken into consideration when working out how to divide the current assets if one party is likely to inherit money in the foreseeable future. It's not a question of the ex-husband being able to claim part of the inheritance; rather, it means that the party likely to inherit (particularly if it's definitely going to be within a year) is not necessarily going to need such a large share of the marital assets if they're certain to get a significant sum of money that will, for example, be enough to buy them a house.

But a parent in their 70s with no major health issues that are likely to lead to a premature death is not likely (imo) to be a significant factor in a divorce. As you rightly say, any potential future inheritance could be eaten away in medical and nursing home bills. There is no guarantee of any inheritance where the parent has a possible 15-20 years of life ahead.
posted by essexjan at 2:49 PM on August 24, 2020 [1 favorite]

In my 2019 divorce in a community-property state that is not MA, this question came up exactly nowhere. Both self and ex-spouse are likely to inherit some assets from our respective parents. How much? When? Who knows... certainly not either of us. It's not anywhere in the financial disclosures that I recall, and gosh, those were exhaustive (and exhausting).

In the OP's shoes, I'd not even bring this up except with my own attorney in confidence, to confirm that it's not a consideration.

Hang in there, OP. It does get easier, in time.
posted by humbug at 3:09 PM on August 24, 2020

Agreed with others that a future maybe-inheritance will not likely be taken into account, and your last point, that your spouse also has a similar future maybe-inheritance of approximately the same size or larger, with similarly aged parents, makes it even less likely. In any case, neither future maybe-inheritance will be considered a marital asset. They might be considered as a data point if a judge thinks your divorce agreement makes it seem like one of you is not getting a fair portion of the marital assets or a fair amount of alimony or other maintenance.

Source: friends who were recently divorced in a similar situation, but in another state.
posted by bedhead at 3:14 PM on August 24, 2020

It's my experience and observation that women work hard to be fair in divorce, and men work to maximize their interests. (don't @ me, this isn't Science). Do not tie yourself in knots being good to your partner, but also make sure things are basically even. Even out the retirement funds, so you each leave with the same amount, cars, debts, property. Potential inheritance that may get used up doesn't seem like it should be in the mix. it is the mediators job to ask good questions and assure fairness and legality. You may have to have it reviewed and filed by a member of the bar that is not the mediator, depends on state law.

My ex- and I had a mediated divorce that went smoothly, way less stressful, expensive, etc. I'm sorry it's happening, but this seems the least adversarial and least painful.
posted by theora55 at 3:57 PM on August 24, 2020 [5 favorites]

Nor should you be considering them in your calculus, presuming you'll get them, etc. Weird stuff happens.

Just echoing this, based on personal experience.
posted by Lexica at 4:52 PM on August 24, 2020 [5 favorites]

It may differ state to state, but in general, inheritance is not considered marital property unless it’s commingled, which It hasn’t in your case since you have not yet received it. It should not factor in the splitting of assets.
posted by katypickle at 4:52 PM on August 24, 2020 [3 favorites]

Divorced person whose ex had an expected large inheritance. Did not factor in at all. There is no way to know what it will be unless it is already locked in some trust.

Had mediators (for a while). If inheritance comes up, you can both agree that what is yours is yours and what is theirs is theirs.
posted by AugustWest at 9:24 PM on August 24, 2020 [1 favorite]

The average lifespan remaining to a 75 year old in the US is 11.3 years for a man and 13 years for a woman (2016 figures). Stats may vary slightly from this in MA but chances are you won't see any inheritance for over a decade.
posted by biffa at 3:21 AM on August 25, 2020

Your spouse has no legal claim on your future inheritance. I cannot see why she/he would have any expectation of receiving part of it. None of it will go to him/her after your divorce, or even before your divorce, as long as you keep those funds segregated from any joint accounts, or put off receiving them until the divorce is final. If you feel it's important to settle this now, you could ask for a post-nup now, in which you both disclaim each other's inheritance, though this shouldn't be necessary.
posted by JimN2TAW at 10:31 AM on August 25, 2020

I don't see how a future inheritance in an unknown/unknowable amount could figure in to a current divorce proceeding. Depending on the state, it might not even figure in even if you had already received it. In NY, for example, monies that you "bring into the marriage" such as "family money" and whatnot are usually not considered "marital assets" subject to splitting in a divorce, so long as those monies have not been commingled with marital monies. Similarly, if you inherit monies while married, so long as those monies are not commingled with marital monies they are usually not considered a marital asset. Thus, if a married person inherits a financial portfolio that stays in a brokerage account maintained in the inheritor's name only, those are not usually considered marital assets. However, if the inherited assets go into a portfolio containing marital assets, such as a brokerage account under both spouse's names, they become marital assets. Or, if marital assets (e.g., from a joint bank account) go into the account containing the inherited monies, the portfolio becomes a marital asset.

None of this is likely to matter to you with respect to your inheritance. First, it sounds like your divorce will be finalized before you inherit. Second, for someone in their 70s who might expect to live another decade and is living on their retirement savings, $1MM is a decent enough amount but not likely to result in a "sizable inheritance" that would be worth squabbling over by people at your respective income levels.
posted by slkinsey at 6:51 AM on August 26, 2020

Your future inheritance doesn't need to factor in at all.

I recommend talking to a divorce financial planner on your own, though. At least here in California, mediators refuse to give any financial advice and as such, their clients inadvertantly screw themselves. I used to be very pro-mediator and now I'm only pro-mediator for people who EACH have professionals on the side for actual advice. (For instance, they'll treat savings account money as equal to 401k money as equal to home equity, without accounting for any of the things that change the actual value of a house, such as capital gains taxes and property tax bases. They treat future pension money as equivalent to money available now, and they don't make any suggestions about differentiating the lump sum that a pension will say a person's accumulated, from the income stream it will represent in the future.)
posted by small_ruminant at 1:46 PM on August 30, 2020 [1 favorite]