Are Inheritances Divided in a Divorce?

If you are going through a divorce and you inherited certain assets from your family members during your marriage, you are probably wondering if that property is subject to division during divorce proceedings. Under California law, an inheritance received before a divorce is considered an individual’s separate property. However, are there circumstances where an inheritance is considered community property, and thus, eligible for division? Today, we go over whether inheritances can be divided in a divorce.

California’s Community Property Laws

California is one of a few states that strictly adheres to community property laws, which declare that assets acquired during a marriage is community, also known as marital, property. Community property means this property belongs to both spouses. However, even California draws a line when it comes to personal inheritances, including inheritances that were received while married.

Inheritances are treated as separate property, belonging to the individual who received the inheritance. Separate property is not subject to division in a divorce.

If you have concerns about keeping your inheritances while going through a divorce, you should consult with an experienced divorce attorney.

Can an Inheritance be Considered Community Property?

Inheritances, unless extenuating circumstances apply, are considered separate property. Unless you do something to alter your inheritance’s separate nature, including the commingling or transmutation of funds, the court will presume that your inheritances belong solely to you.

Commingling Your Inheritance

When you use your inheritance as marital property and open a joint bank account with your spouse or use money from your inheritance to pay for a home, the court has a difficult time determining what is community property and what is separate property. These assets become commingled and the court may consider your inheritance to be community property.

On the other hand, if you deposit your inheritance into an account in your name and do not commingle funds from this account with your marital funds, your inheritance will remain separate property. It is important to note that if you deposit a paycheck into your inheritance account, this is considered commingling. This is because in California, your paychecks are considered community property.

Transmutation of Your Inheritance

Transmutation is an act on your part that indicates your intention to alter the nature of your inheritance from separate property to community property. An example of this would be if you inherited property and then transferred into both you and your spouse’s names. The court will take this move as you intending to gift your inheritance to your marriage.

How to Keep Your Inheritances from Being Divided in a Divorce

• Do not invest the money you inherited into a home for you and your spouse
• Do not use the inheritance to pay off any joint debts
• Keep proof that you received an inheritance
• Open a separate account in your name for your inheritance
• If you use your inheritance to purchaser assets, keep documents to prove that said assets were purchased with funds from this account

If you need assistance navigating your divorce, contact our firm onlineor call us at (916) 634-0067.