Jun 14, 2026
Divorce can have a huge impact on your finances. In fact, research published by the Journal of Marriage and Family showed that you don’t just face immediate costs associated with legal fees and division of assets. People who have been divorced also generally have lower savings rates and lower levels of wealth accumulation over the long run.
That’s why you must take steps to protect your finances if you’re considering divorce. And that’s especially true if you’re about to inherit a lot of money.
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Let’s pretend, for example, that Caroline’s wealthy mother sadly has a terminal illness and a few short weeks to live. Caroline has been considering divorcing her husband, and she’s now worried that she may lose some of her inheritance in the divorce after her mom dies.
So, what can Caroline do to make sure the money stays hers, even if she splits from her husband?
Estate planning can help protect assets
Since Caroline’s mother is still alive, one of the best ways that Caroline can protect her inheritance is to ask her mother to do some estate planning.
Provided her mother is willing and able, there are techniques she could use to protect the money. However, Caroline will want to make sure that her mom is clearly acting of her own free will and is of sound mind, or else her instructions could be challenged. As long as that’s the case, her mom has a clear path to protecting the inheritance.
“The inheritance should not be transferred to the person considering divorce,” Asher Rubinstein, an asset protection attorney and partner at Gallet Dreyer & Berkey, LLP, told MoneyWise. “Instead, the inheritance should be transferred to an independent, irrevocable trust.”
Asher explained that the person considering divorce would be the trust beneficiary, and the assets should be transferred to the trust instead of to Caroline directly. The trustee appointed to manage the trust would keep the assets safe from creditors, including marital creditors.
He also said distributions from the trust should be discretionary, not mandatory, as those are harder to go after, and that Caroline shouldn’t mix any of that money with her marital assets.
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“The trust document should have a robust spendthrift clause, which would allow the trustee to pause distributions if the beneficiary is going through divorce or other litigation,” he added.
Caroline’s mother could talk to a lawyer to put this arrangement in place.
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Inheritances usually aren’t marital property
Caroline is in a good position because her mom still has time to take action. But even if that wasn’t the case, she could likely still keep the inheritance — as long as she made careful choices about what she did with it before the divorce.
“In most cases, your inheritance should be safe as it would not be considered a marital asset,” Joseph Fresard, attorney at Simasko Law, told MoneyWise. “However, if it got commingled with other assets over time, there could be a risk.”
Caroline should take great care to keep the money and property separate once she receives it.
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“It’s important to avoid commingling inherited funds with marital assets,” warned Kirk Stange, founding partner of Stange Law Firm, a multi-state divorce and family law firm. “If wages, marital funds, or money belonging to a spouse are deposited into the same account, it can become more difficult to distinguish the inheritance from marital property based on a legal doctrine known as commingling. Keeping inherited assets in a separate account titled solely in the recipient’s name can help preserve their separate character.”
Talking to a lawyer is your best bet
Unfortunately, state laws can vary, so while keeping property separate can often protect it, that may not apply in every situation.
“The rules differ dramatically depending on where you live, so a strategy that protects an inheritance in one state may do nothing in another,” warned Julia Rueschemeyer, a divorce lawyer in Massachusetts.
“Massachusetts is an outlier,” Rueschemeyer told MoneyWise. “Under our property division statute, a judge has authority to divide essentially any asset either spouse owns, including gifts and inheritances, regardless of whose name is on it. That means in Massachusetts you can’t assume an inheritance is automatically off-limits in a divorce, even if it has not commingled.”
Rueschemeyer suggested a postnuptial agreement to keep the money safe — if Caroline’s husband would sign. She also advised talking to a divorce lawyer about how to structure the inheritance before it’s received.
With a lot of money at stake, getting legal advice is going to be the best idea for Caroline. She should look for an attorney experienced in issues related to inheritance and divorce, and do so as quickly as she can.
That way, she can immediately begin taking any steps necessary to protect the money her mom is so generously going to leave her.
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
