There are many aspects of divorce that can be complicated but in many cases determining property rights is the hardest part of all. California is a community property state which means that any assets obtained during the marriage are split 50 / 50 and any assets a person brought into the marriage are theirs when they leave it. There are exceptions, such as pre-nuptial agreements with other specifications, inheritances, and business income. Today we are going to look at the issues surrounding inheritance.
Inheritance is Considered Separate Property in California
Most money coming in during a marriage will be community property, including wages, intellectual property, cars, furniture, etc. and if the couple divorces the assets are split. However, gifts and inheritances directed to one spouse are not community property. This is true whether the inheritance happened before the marriage or during it. In almost all cases, the spouse of the person who inherited will not have rights to the inheritance – with a few exceptions.
Spouses Can Assign Inheritance Money as Community Property
In a legal move known as transmutation, any property that is inherited can be considered community property if the spouse who inherited it assigns ownership to their spouse. Consider this example: A person inherits a house when their mother dies. That person chooses to add their spouse’s name to the deed. Said spouse would then have an ownership interest in the property and it would likely be considered community property in the event of divorce.
Commingling of Money Can Complicated Inheritance Issues
If you inherit money and keep it in a separate account then it will be easy to keep sperate from marital funds, but what happens when you put that money into a joint account? If those funds comingle over a number of years, then it can be difficult or impossible to convert that money to separate property. The person who inherited would have the burden of proving that it was still separate property.
How to Protect Your Inheritance in a Divorce
If you have received an inheritance then you should keep detailed records of everything you do with it. If it is liquid, put it in a bank account that is separate from your spouse. If it is real property, do not assign ownership to your spouse. Remember that you must actively give your spouse rights to the property because they do not legally have them.
Questions About Divorce and Inheritance? Call Us Now
Do you have additional questions about how inheritances are treated in a divorce? Do you want to talk to a family law attorney who will listen to your case and find the best way forward or you? Then contact Kendall Gkikas & Mitchell at 909-482-1422 to schedule a consultation.
