Transfer of Title Can Convert Inherited Separate Property Into Marital Property Subject to Equitable Division
In a recent landmark decision, the Supreme Court of Georgia held that even where no marital contribution is made to the separate property that is received by a spouse through gift, inheritance, bequest or devise, it can be converted to marital property when the recipient spouse transfers full, partial, or joint ownership of the property to his spouse. Shaw v. Shaw, S11F1586, decided January 9, 2012. In Shaw, a Husband inherited two brokerage accounts and real estate in Florida. He put his Wife’s name on the brokerage accounts and the real property deed, thereby converting his separate property interest to a marital property interest subject to equitable division in his divorce. Prior to Shaw, attorneys tried to trace the separate interest which was comingled, or applied a formula known as the “source of the funds” to determine what portion of a comingled asset was separate and what portion was marital.
The moral of the story is to keep an inheritance separate if you want to protect it in divorce!