Can You Protect Your Child’s Inheritance from Divorce?

 Posted on April 11, 2025 in Family Law

When you leave an inheritance to your child, you likely imagine it helping them build a secure life. What you may not expect is for that inheritance to become a point of contention in a future divorce. Without the right legal protections in place, a gift meant to provide stability could end up divided in a courtroom.

Understanding how to protect your child’s inheritance can give you peace of mind and prevent unwanted legal complications down the road. An Illinois estate planning and family law attorney can guide you through the best strategies to help preserve your family's legacy.

Is Inherited Property Considered Marital Property in Illinois?

Under the Illinois Marriage and Dissolution of Marriage Act, property obtained by gift or inheritance is generally considered non-marital property. This means it is not subject to division during a divorce. However, an inheritance may lose its protected status if:

• It is commingled with marital assets

• It is used to purchase marital property

• The inheriting spouse uses it to support both parties' lifestyles without clear documentation

To keep the inheritance separate, your child should keep it solely in their name and avoid mixing it with any shared property.

How Can a Trust Help Protect an Inheritance?

Creating a trust is one of the most effective ways to protect your child's inheritance from a potential future divorce. A properly structured trust can help by:

• Keeping assets separate: Assets held in a trust are not in the child’s name and are, therefore, not marital property.

• Limiting control: If the trust is irrevocable and managed by a trustee, your child cannot control the assets, which makes them less likely to be considered joint property.

• Providing long-term protection: Trust terms can determine how and when assets are distributed. This can be helpful if your child divorces years after receiving the inheritance.

What Should Your Child Do to Avoid Commingling Inheritance Funds?

If your child has already received an inheritance or may receive one in the future, it is vital that they keep those funds separate from any marital assets. This means opening a bank account in their name only and not using inherited money for joint purchases or shared household expenses. 

It is also important to maintain detailed records of how the inheritance is used in case it ever becomes necessary to prove that the funds were kept separate. While these measures may seem straightforward, they are crucial in preserving the inheritance as separate property in the event of a divorce.

Can a Prenuptial or Postnuptial Agreement Help?

A prenuptial agreement or a postnuptial agreement can clearly state that an inheritance is separate property and will not be subject to division in case of divorce. To be enforceable in Illinois, these agreements must be fair, in writing, and entered into voluntarily with full financial disclosure.

Contact a DuPage County, IL Estate Planning Lawyer

If you want to protect your child's inheritance from potential divorce proceedings, speak with a knowledgeable Cook County, IL family law attorney. Whitacre & Stefanczuk LTD can help you understand your options, draft protective legal documents, and plan effectively for the future. We will communicate with you through every step of the process so that you can feel confident knowing everything is properly handled. Call 773-622-6100 to schedule a free consultation today.