How Does Inheritance Get Divided in an Illinois Divorce?

When you are going through a divorce in Illinois, you are likely worried about what will happen to your money and property. If you have received an inheritance—whether it is from a parent, grandparent, or another loved one—you may be wondering: Will I have to share it with my spouse in the divorce?

The short answer is: probably not, but it depends on how you handled the inheritance during your marriage. Illinois law generally protects inherited assets as your own separate property, apart from the marital estate, but there are exceptions. And even when the inheritance itself stays yours, the income it generates can still come into play when the court calculates things like child support and spousal maintenance.

Inheritance is Usually “Non-Marital Property”

Under the Illinois Marriage and Dissolution of Marriage Act (IMDMA), property is divided into two big categories: marital property and non-marital property.

• Marital property is almost everything either spouse acquires after the wedding. That includes paychecks, real estate bought together, retirement savings earned during the marriage, and even debt. The court divides marital property between both spouses in a fair way when you divorce.
• Non-marital property is treated differently. Section 503(a)(1) of the IMDMA specifically says that property received by “gift, legacy, or descent”—in plain language, an inheritance—is not considered marital property. That means if you inherit something, it’s yours alone and not something you are required to divide with your spouse.

Seems simple enough. There is, however, an important catch.

How Inheritance Can Accidentally Become Marital

Even though inherited assets start out as non-marital property, the way you handle those assets can change their status. This is sometimes called commingling or transmutation. Here’s what that could look like:

• Mixing accounts. If you put inherited money into a joint checking or savings account and then use it for bills, vacations, or household expenses, it is no longer easy to distinguish what is your separate property and what is marital. Those funds have all been commingled together in one big pot, and Illinois courts often treat them as marital property when that happens.
• Using inheritance for joint purchases. If you use inherited money to buy or improve a house you both live in, pay down the mortgage, or make large purchases for the family, you may have turned that inheritance into marital property.
• Not keeping records. If you cannot clearly document that the money came from your inheritance and that it stayed separate, you will have a hard time convincing the court it is still non-marital.

The law assumes everything acquired during the marriage is marital property. If you want the court to treat something as non-marital, you should be able to prove it with documentation.

What About Reimbursement?

Illinois law also has a built-in system for reimbursement if one type of property benefits the other. For example:

• If you use non-marital inheritance to fix up a marital home, you might be entitled to be reimbursed by the marital estate for that contribution.
• On the flip side, if marital money is used to preserve or grow your inheritance (say, using joint funds to pay property taxes on inherited land), the marital estate may be reimbursed.

The court looks at whether the contribution was intended as a gift. If the judge decides you intended to gift that money to the marriage, then reimbursement might not be warranted.

A Real Illinois Example: In re Marriage of Dahm-Schell & Schell, 2021 IL 126802

Sometimes the best way to understand how this works is to look at how it played out in a real case.

In In re Marriage of Dahm-Schell & Schell, Husband inherited several retirement accounts worth over $600,000 during the marriage. Because inheritance is classified as non-marital under the law, the accounts themselves were awarded to him in the divorce.

But here’s the twist: retirement accounts like IRAs often require mandatory distributions once you reach a certain age. The court had to decide whether those withdrawals counted as Husband’s “income” when figuring out spousal maintenance and child support.

The Illinois Supreme Court ruled that yes, the withdrawals did count as income. Even though the inheritance itself was a non-marital asset, the money it generated could be considered when calculating Husband’s child support and maintenance obligations in the divorce. That meant the inherited accounts affected how much support he owed.

This case shows two important lessons for anyone with inheritance in a divorce:

• The asset itself may be protected.
• But the income it produces can still impact your finances after divorce.

Tips for Protecting Your Inheritance

If you want to keep your inheritance separate and avoid headaches during a divorce, here are some practical steps:

• Keep it in a separate account. Do not deposit inherited funds into a joint bank account. Keep them in an account in your name only.
• Avoid using it for marital expenses. As tempting as it may be, using inherited money for family bills, mortgage payments, or vacations may convert it into marital property.
• Document everything. Save bank statements, estate paperwork, and transaction histories. The clearer your paper trail, the easier it is to prove your inheritance stayed separate.
• Get legal advice early. If you have already mixed inheritance funds with marital assets, don’t panic. A lawyer may be able to help trace and protect what’s left or argue for reimbursement.

Common Client Questions

Q: My spouse and I bought a home using part of my inheritance. Do I lose all of it?
A: Not necessarily. The court might decide the home is marital property, but you may have a right to reimbursement for the inherited funds you contributed.

Q: What if I inherited something before I got married?
A: Inheritance you received before the marriage is still considered non-marital. The same rules about keeping it separate apply.

Q: Does this apply only to money? What about jewelry, land, or a family business?
A: The rule applies to all types of inheritance—cash, property, valuables, or business interests. The key is whether you kept it separate or combined it with marital property.

Why This Matters for Your Divorce

Divorce in Illinois is not just about splitting assets 50/50. The law requires courts to divide marital property in a way that is “equitable,” which means fair, not necessarily equal. Knowing whether your inheritance counts as marital or non-marital can make a huge difference in your financial future.

For many people, inheritance represents not just money, but a family legacy. Protecting that legacy requires planning, record-keeping, and sometimes tough conversations with your lawyer and your spouse.

A Family Law Attorney in Chicago Can Help

Your Inheritance is generally yours alone in an Illinois divorce because the law defines it as non-marital property. However, mixing inheritance with marital assets can change that, so it is important to keep it separate and well-documented. If you have received or expect to receive an inheritance, do not assume those assets are automatically safe in your divorce. Reach out to an experienced family law attorney for advice on how to preserve your inherited assets. The skilled and savvy lawyers of O. Long Law, LLC, are standing by to help. Schedule your initial consultation with us today.