Can a Prenup Protect Inheritance in Alabama

Generally, a prenuptial agreement is not necessary to protect an inheritance in Alabama. Money or property received from an inheritance are solely the property of the spouse who received them. The items are termed separate property. The court in a divorce will not generally divide an inheritance for one spouse between the spouses upon divorce.  Prenup Protect Inheritance

The exception to this rule is usually if the non-inheriting spouse made an effort to increase or change the nature of the inheritance. Then that person may be entitled to some or all of it. For example, say a wife inherited three shares of stock in a corporation. Her husband sold the shares and bought six shares of stock in a different corporation. Since the husband put in the work to alter the nature of the inherited property, he would be entitled to some or half of the stock. This is why it is important to have a local divorce attorney in Tuscaloosa, or wherever you live, when considering a prenuptial agreement.

The rule also applies to inherited real property, like a home, or personal property, like a boat. When a spouse adds on to a home or improves a boat, they are entitled to the value of their contribution or half of the value of the item. 

Spouses do not need to address inheritance in a prenuptial agreement, yet they can choose to do so. How they describe the inherited property and what each of them does to manage is useful to address questions later. If you have questions about inheritance and prenuptial agreements, then you can always ask out divorce attorneys in Hoover or wherever you reside.

When two spouses draft a prenuptial agreement, they are supposed to disclose their assets and debts to one another. A spouse may not be able to disclose an inheritance if they have not received it yet. It is not fraudulent behavior to fail to disclose an unknown and/or unreceived inheritance before drafting a prenuptial agreement. 

Generally, a prenuptial agreement will be considered conscionable and valid if the transaction was “fair, just, and equitable.” There must be adequate consideration for the agreement. The agreement must be freely entered into by both spouses. The spouses must have made a full disclosure of the assets and debts known to them at the time that they entered into the agreement. Both spouses must have received competent, independent advice from a party knowledgeable in the field, like a financial counselor. 

When an inheritance includes part or all of a business, it’s unclear whether a prenuptial agreement can fully protect the inherited property. A non-inheriting spouse might be entitled to some or part of the inherited business if they worked at the business and contributed to its success or gave assets like cash or personal property to help the business succeed. Spouses who want to discuss how a prenuptial agreement might cover a business should talk with a Montgomery divorce attorney with experience in understanding how businesses are founded, funded, and managed.

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