I will soon inherit (currently in probate) close to $320,000 from my mother's estate and as a beneficiary on various accounts, and would like to do the following:
Use $80,000 to pay off student loans and other various debts my wife and I have.
Use $100,000 as a down payment on a home for me, my wife, and two children.
Invest the remaining $140,000, and keep in my name only.
The way I feel, the $80,000 in debt is something my mother would want me to pay off in full for both my wife and I. The vast majority of the debt was incurred during the early years of my wife & I being together, and at this time, I feel I would not look to recover any of it in the event of a divorce.
The $140,000 I plan to invest in a seperate account, from what I have read, will remain seperate as long as I keep the account seperate from marital assets. Please correct me if I am wrong on this.
My question is really around the $100,000 down payment on the house. Is there any way to protect this from becoming marital property, if I go ahead with this? I know any additional equity in the home would be marital property, but I would like to keep the $100,000 down payment in full, in the event of a divorce.
I should outiline that I am not looking at getting a divorce, but would like to be realistic, plan, and keep the inheritance from my mother protected, just in case. Also as info, I live with my family in New Jersey, and my mother's estate is being handled in New York Surrogate's court, as she lived there.
Thank You for your assistance!!
Family Law Attorney
Once the Surrogate's Court completes its final orders of distribution and no appeal takes place, the money is yours and you can do with it whatever you wish.
Money tends to make people think differently than they would otherwise. Sure, you're inheriting a large sum of money, but you didn't win the lottery. So you need to consider good financial planning more than you need to worry about whether your wife will get any of it upon separation and divorce. So, my first recommendation is that you contact a good financial planner and determine the best uses for your money in the present time.
Then, if you really want to keep this money separate, contact a local family law attorney, tax attorney and estate counsel in New Jersey.
Divorce / Separation Lawyer
If kept in a separate account in your name, the $140,00 will remain an exempt asset.
The only sure way to protect the downpayment on the home is to do so through a written post-nuptual agreement. If your marriage were to end in a short period of time after the purchase, and you had no written agreement, you will probably get some consideration for the downpayment in a divorce, but after 5-10 years, it will lose all protection.