Understanding How Illinois Treats Inherited Property in a Divorce 

 Posted on May 21, 2026 in Divorce

Divorce can be a complicated and emotionally charged process, and property division is often one of the most contentious issues. In Illinois, inherited property is generally considered separate property and not subject to division in a divorce settlement. However, some exceptions to this rule can make things more complicated. 

If you are getting a divorce, it is in your best interest to seek skilled legal representation to help ensure your rights are protected. At The Stogsdill Law Firm, P.C., our Wheaton, IL divorce lawyers can help you pursue a favorable division of property, as we have over 100 years of combined experience. We are recognized as one of the most prestigious law firms in DuPage County thanks to our devoted counsel and representation, so you can trust us to address any concerns about inherited property with care.

Important Considerations for Inherited Property in Illinois Divorce

As stated previously, when a person inherits property, cash, or similar assets, it is usually considered their separate property, which makes it exempt from division during divorce proceedings (750 ILCS 5/503). However, in certain situations, inherited property may lose its status as separate property and become subject to division.

One situation where inherited property may lose its status as separate is when it is commingled with marital property. For example, suppose a spouse inherits money and deposits it into a joint bank account with their spouse. In that case, it may lose its status as separate property and become subject to division in a divorce. Another situation where inherited property may lose its status as separate property is when it is used to benefit the marriage in some way. For instance, if a spouse uses inherited funds to pay for the mortgage, the money invested in the home has lost its separate identity.

What if Inherited Property Increased in Value During the Marriage in Illinois?

As long as an inheritance is kept separate from marital assets, it will usually remain separate property. This is true even if it has gone up in value. However, the answer can change if the other spouse helped increase its value.

In that case, the increase may be considered marital property. Consider a situation where one spouse inherits a house. If the other spouse makes improvements to the home, the added value could be treated as marital property.

Is it Worth It To Go to Trial for Inherited Property in 2026?

Going to trial for inherited property may be worth it when the inheritance is valuable and the facts are strongly in your favor. For example, a trial may make sense if you inherited a large sum, kept it in a separate account, and have records showing where it came from. It may also be necessary if your spouse claims they should receive part of it because marital money was used to improve or maintain the property.

Trial can be expensive, stressful, and slow. Many spouses are better served by negotiating a settlement. Still, if the inheritance affects your long-term financial security, you may need to present evidence to a judge. Bank records, estate documents, account statements, and property records can all matter.

How To Avoid Commingling Inherited Property in Illinois

Commingling happens when separate property gets mixed with marital property. Once that happens, it may become harder to prove that the inheritance should stay separate. In some cases, the court may treat all or part of it as marital property.

The best way to avoid this problem is to keep inherited money in a separate account. Do not deposit it into a joint checking or savings account. Do not use it to pay regular household bills. Do not use it to pay down the mortgage on a home owned by both spouses unless you understand the risk.

You should also keep clear records. Save letters from the estate, trust documents, checks, wire records, account statements, and any paperwork showing the source of the money. If you use inherited money to buy something new, keep proof of that purchase. For example, if you use inherited funds to buy a car, investment account, or real estate, records can help trace the asset back to the inheritance.

Are Personal Gifts During the Marriage Considered Marital Property in Illinois?

Personal gifts can be treated differently from regular marital property. However, the details matter. A birthday gift given directly to one spouse may be separate property. A gift given to both spouses may be marital property. For example, if a parent gives both spouses money for a down payment on a marital home, the court may view that money differently than a check written only to one spouse.

Proof is important. If you claim something was a personal gift, you may need records or testimony showing who gave it, why it was given, and whether it was meant for one spouse or both spouses. Expensive jewelry, family heirlooms, cash gifts, and gifted vehicles could end up at the center of a property dispute if the spouses cannot agree.

Is There Anything You Can Do if Your Spouse Wastes Your Inheritance?

If your spouse wasted inherited money, you may be able to raise a dissipation claim. Dissipation generally means one spouse used property for a purpose unrelated to the marriage after the marriage had started breaking down. This could include spending inherited funds on an affair, gambling, luxury items, hidden transfers, or other expenses that did not benefit the family.

Timing matters. In Illinois, dissipation focuses on spending that occurred after the marriage began to suffer an irretrievable breakdown. You also have to pay close attention to deadlines. A spouse usually must give notice of a dissipation claim within a specific time. The claim generally cannot reach back more than five years before the filing of the divorce petition or three years after the spouse knew or should have known about the dissipation.

Contact a Wheaton, IL Divorce Attorney Today

Property division can be difficult, especially when there are disputes about which property belongs to whom. If you are getting a divorce, contact the knowledgeable DuPage County, IL family law attorneys with The Stogsdill Law Firm, P.C. to help with all your divorce and property division needs. Call 630-462-9500 for a private consultation.