Under South Carolina law, if you're married, both you and your spouse jointly own everything that either of you acquires or earns during the course of your marriage. However, some assets obtained during a marriage can belong to one spouse alone. In South Carolina, inheritances fall into this category.
Whether it is in the form of cash or real estate, inheritances are often not subject to property division. The spouse who receives an inheritance will generally not be made to provide a share of the money to the other.
Alas, there are some exceptions to this rule. In order for the inheritance to remain non-marital, it must remain separate and segregated from the family's other finances.
What is Commingling?
You can invalidate your separate property in South Carolina by commingling, which means mixing the inherited separate property with the other spouse's marital property. For instance, if you inherit cash and you deposit it in a bank account you hold jointly with your spouse, the money loses its immunity. So if the parties later divorce, the other spouse can argue that when the inherited funds were combined with other marital funds, they lost their non-marital status and transmuted into marital property.
Another scenario that typically occurs when inherited cash is used to purchase or pay for a house. Even if the house is titled under only one spouse's name, the court could potentially determine that the inheritance became marital, especially if joint funds were used to pay other expenses on the home, including mortgage payments, property taxes, maintenance, or homeowners insurance.
How Do I Keep Inheritances Separate?
If your spouse agrees that the inheritance is yours alone, you both can sign a postnuptial agreement which the court will honor in a divorce. On the other hand, you can still take proactive steps to protect your inheritance by not using it to pay a home mortgage or debts.