How Do I Protect an Inheritance From Divorce?
Keep the paper trail, because Missouri already protects the inheritance itself and no transfer you make this month improves on that.
That is a strange sounding answer to a question about protection, and it is the accurate one. Most people asking how to protect inheritance from divorce are worried about something the statute settled decades ago. What the statute does not do for you is prove where the money came from.
So the work is threefold. Keep the inheritance traceable, understand how marital money or marital effort can attach to its growth, and avoid the handful of moves that suggest you meant to make it marital.
Is an Inheritance Already Separate Property?
Yes, and it does not require you to do anything.
Section 452.330.2(1) RSMo excludes “property acquired by gift, bequest, devise, or descent” from marital property. Most inheritances land squarely inside that.
The next exception is the one people miss. Section 452.330.2(2) RSMo also excludes “property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent.” So the separate character can follow the value into whatever the inheritance buys, to the extent the funds can be traced into the purchase.
The protection exists. The fight is about proof, which is why every practical step to protect inheritance from divorce is a records step rather than a legal one. The Missouri Courts dissolution information pages set out the wider process those records get exchanged in.
Then What Is Actually at Risk?
Three things, and only the first is really about records.
Section 452.330.3 RSMo presumes that anything acquired during the marriage is marital, and puts the burden on the spouse claiming otherwise. Three questions decide how heavy that burden gets.
- Can you show where it came from. A documents problem, and the easiest of the three to solve if you start early
- Did you put it in both names. An intent problem, and the one that does the most damage
- Did marital money or marital effort build the increase in value. A history problem, and the one that takes the most work to unpick
None of them is solved by moving the asset. That is the central point of this page, and the reason to protect inheritance from divorce by keeping records rather than by rearranging accounts.
What Standard of Proof Applies?
Clear and convincing evidence, which is a real step above the ordinary standard.
In Blydenburg-Dixon v. Dixon, 277 S.W.3d 815 (Mo. App. W.D. 2009), the Western District stated that “because of the statutory presumption that property acquired during marriage is marital, non-marital property must be proven by clear and convincing evidence.”
Selby v. Selby, 149 S.W.3d 472 (Mo. App. W.D. 2004) then defines it in one sentence. Clear and convincing evidence is evidence that “instantly tilts the scales in the affirmative when weighed against the evidence in opposition, and the fact finder’s mind is left with an abiding conviction that the evidence is true.”
Read that as one sentence rather than two ideas. It has to tip the scales and leave an abiding conviction. That is not a standard anybody meets from memory in a courtroom four years later. It is met with statements, closing documents, estate records and a history somebody can follow without help.
What Records Actually Matter?
The ones that connect the inheritance to its current form in order, with no gap in the chain.
- Estate records, meaning the will or trust instrument, the probate file, executor correspondence and the distribution schedule
- Proof of receipt, meaning the check or wire confirmation and the statement showing the deposit date
- Full statements for every account the money passed through, not summaries and not year end totals
- Purchase records for anything bought with it, meaning closing statements, titles and brokerage confirmations
- Records of what happened afterward, especially where marital income later entered the same account
Gather these sooner rather than later, for an unglamorous reason. Banks do not keep statements forever. Executors move away. The person who could explain a 2014 transfer in one sentence may not be reachable when somebody finally asks.
A clean chain does not guarantee an outcome. It gives you the ability to explain the history rather than assert it, and that is the whole of what you can do to protect inheritance from divorce before anybody files.
What About Growth in Value?
Passive growth generally stays separate. Growth built by marital money or marital work is a different question.
Section 452.330.2(5) RSMo excludes “the increase in value of property acquired prior to the marriage or pursuant to subdivisions (1) to (4) of this subsection, unless marital assets including labor, have contributed to such increases and then only to the extent of such contributions.”
Note the two words including labor. Money is not the only marital contribution the statute counts. Work is.
Missouri applies a five element test where marital effort is claimed to have built the increase. In Meservey v. Meservey, 841 S.W.2d 240 (Mo. App. W.D. 1992), the Western District held that marital labor entitles a spouse to a share of the increase “only after comprehensive substantiation,” and lettered the required proof (A) through (E).
- “A contribution of substantial services”
- “A direct correlation between those services and the increase in value”
- “The amount of the increase in value”
- “Performance of the services during the marriage”
- “The value of the services, the lack of compensation, or inadequate compensation”
The Supreme Court of Missouri applied that framework in In re Marriage of Hillis, 313 S.W.3d 643 (Mo. banc 2010), docket SC 90458, a case about a funeral home whose value rose substantially during the marriage on one spouse’s management and bookkeeping.
Classification also follows the money in. Short v. Short, 356 S.W.3d 235 (Mo. App. E.D. 2011) states the rule plainly, that “the source of funds rule states that property is marital to the extent that the source of funds used to acquire it is marital,” a rule the Supreme Court of Missouri adopted in Hoffmann v. Hoffmann, 676 S.W.2d 817 (Mo. banc 1984).
The practical version. An inherited house that appreciated because the market did is a very different case from an inherited rental one spouse managed, renovated and re-let for a decade.
What Is the One Thing That Puts It at Risk?
Putting it into both names, and the reason people do it is almost always innocent.
In Selby, the Western District held that when a spouse places separate property into the names of both spouses, “a rebuttable presumption arises that the property has been transmuted into marital property,” and that the presumption “can only be rebutted with clear and convincing evidence that the owner spouse did not intend to convert the property to marital property.”
Look at the facts, because they are ordinary. A 446 acre farm was moved out of a trust into joint names in connection with bank financing, and moved back after the loan was dealt with. Nobody was trying to give anything away. The classification still ended up in dispute, and the case was reversed and remanded.
So the rule to remember is short. Before adding a spouse to any deed, account or title touching inherited property, ask first. A refinance, a lender’s convenience request or a well meant gesture all produce the same presumption.
Does Mixing It With Marital Money Lose It?
Not automatically, and the statute says so in one sentence.
Section 452.330.4 RSMo provides that “property which would otherwise be nonmarital property shall not become marital property solely because it may have become commingled with marital property.”
Commingling is not fatal. It is expensive. Every additional account the money passed through is another link somebody has to prove, and at some point tracing stops being a matter of pulling statements and becomes a matter of hiring an expert. That cost, not the legal rule, is what actually erodes a claim.
What Does Not Work?
Moving or retitling the asset once a divorce is in view.
Section 428.024.2 RSMo, part of Missouri’s Uniform Fraudulent Transfer Act, lists eleven factors on the question of actual intent. They include whether the transfer was to an insider, whether the transferor kept possession or control, whether it was disclosed or concealed, whether “before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit,” and whether it happened close in time to a substantial debt.
Separately, “the conduct of the parties during the marriage” is one of the five factors Section 452.330.1 RSMo directs a court to weigh in dividing the marital estate. A transaction nobody can explain lands in that analysis.
Timing is the whole difference. Planning done years ahead is planning. The same step taken the month a case starts is a transaction somebody will ask about, and attempts to protect inheritance from divorce after the fact tend to create the argument they were meant to prevent.
What Does Protection Not Mean?
It does not mean the inheritance is invisible. People who set out to protect inheritance from divorce often expect it to drop out of the case entirely, and it does not.
Separate property is set apart to the spouse who owns it. That is not the end of its relevance. Section 452.330.1 RSMo directs the court to consider “the value of the nonmarital property set apart to each spouse” when dividing the marital estate, so a substantial inheritance on one side can change how everything else is allocated.
It can also be relevant to spousal maintenance, which turns on financial resources and reasonable need.
That is not a loophole anybody found. It is the statute working as written, and understanding the difference between classification and division is what lets you plan around it honestly. Our FAQ on dividing marital property covers those factors, and our page on marital versus separate property covers the classification step.
Who Can Help Protect an Inheritance in a Missouri Divorce?
The honest version of this conversation is shorter than people expect. Missouri already treats the inheritance as yours. The work is proving the history rather than rearranging the asset.
Bardol Law Firm practices only family law and handles property and asset division for families in St. Louis County, St. Louis City, St. Charles County and Jefferson County. You can read more about our high net worth divorce practice, about property and asset division, and the rest of our family law questions and answers.
Bring the estate file and the account statements to a first conversation. Every client here has a named paralegal on the file, and we generally return calls within one business day.
Family Law, Simplified.
If you are trying to work out how to protect inheritance from divorce and somebody has suggested moving it, have this conversation before you do. Contact Bardol Law Firm or call 314.918.0100.
This page is general information about Missouri law and is not legal advice. Bardol Law Firm practices family law only and does not draft trusts or provide estate planning or tax advice. Every case turns on its own facts. The choice of a lawyer is an important decision and should not be based solely upon advertisements.