Solving Complex Family Law Issues with Creative Strategies

What Happens to an Inheritance During a Divorce?

Many people want to leave a legacy to their loved ones and do so by giving them an inheritance. However, people also worry about the legacy they leave behind being squandered by a spouse or lost in divorce. The legal team at Moradi Saslaw Family Law Attorneys can provide you with quality legal counsel and representation in cases involving divorce and inheritance. Learn more about how we can help by calling (415) 872-1080 or contacting us online.

Community Property

California is a community property state, meaning that property acquired during the marriage is generally considered equally owned by both spouses. For example, if the inheritance was given equally to both spouses, it would be considered community property. In the event of a divorce, community property must be divided between the spouses. There are a few situations when property obtained during the marriage is not considered community property and is instead considered separate property.

Separate Property

Separate property is defined under California law as:

  • Property owned before marriage
  • Property obtained after marriage by gift, bequest, devise, or descent
  • Rents, issues, and profits obtained from separate property

Additionally, any increase in the value of separate property is also considered separate property and not subject to division in a divorce. Therefore, if you received an inheritance during your marriage, it will generally be considered separate property.

When Separate Property Can Become Community Property

However, there are a few situations in which separate property can become community property, such as:

  • Transmutation – A spouse can effectively change the character of separate property by an event, such as signing a quitclaim deed for real property to their spouse.
  • Commingling – Property may be part community property and part separate property when the two types of property are mixed together. For example, a spouse may add funds from an inheritance into a bank account shared with the other spouse. Sometimes, it can become impossible to tell the character of the property because it is so intertwined.
  • Contributions of money – If a spouse contributes community property funds toward separate property, such as using these funds to pay a mortgage for a house bought before marriage, the spouse may have an interest in the other spouse’s separate property.
  • Contributions of time, effort, or energy – If a spouse makes other types of contributions other than monetary ones, such as working at a business that is separate property, the spouse can acquire an interest in the separate property.

These situations are complex, but an experienced Newport Beach family law lawyer can help you understand your rights.

Marital Agreement

Because of the possibility of an inheritance potentially becoming muddled with community property, some couples choose to enter into a marital agreement before or after marriage. Such agreements can clearly define separate and community property and set expectations for how money and property is handled during the marriage.

We Can Help with Your Inheritance Legal Matters

If you are concerned about your inheritance in a divorce or would like help creating a marital agreement to protect your inheritance, the legal team at Moradi Saslaw Family Law Attorneys is here to help. We understand California’s complex community property laws and can explain your options during a confidential case review. Call us at (415) 872-1080 or contact us online to schedule your consultation.