Posted by Gurjit Srai In Divorce June 19, 2019 0 Comment

One of the reasons why divorce proceedings are complicated and can be hotly contested is the allocation and division of assets.

Before you can start the discussion of how assets are divided, you need to first identify which assets must be allocated. Under California law, property is either classified as community property or separate property at the time of divorce. Separate property is retained in its entirety by each individual spouse, while community property is divided equally.

What happens if you received an inheritance at the time of divorce? Is that considered community property or separate property? Will you have to split your inheritance with your spouse when you divorce? In most cases, inheritance belongs to the spouse that got it at the time of divorce.

What Is Inheritance?

When you are chosen to receive property or money from someone who has passed away, it is called inheritance. When someone dies, their property gets transferred to other people.  Many times, transfers of property are done according to the decedent’s will. In cases where there is no will, the property will get transferred according to state probate laws.

Most Inherited Property is Considered Separate Property

If you inherited property or cash before getting married, California law considers it separate property. Any property or cash that you inherited while you were married is also considered separate property under California law. This means that inherited property is yours, and yours alone, if and when you get a divorce. It will not be divided upon dissolution of your marriage.

However, as with most things, there are exceptions to this general rule.

Transmutation of Inherited Property

Inherited property or cash can become community property if you assigned ownership of that property or cash to your spouse. For instance, lets say you inherited a house when your mother passed away. You decide to add your spouse’s name to the deed. Once you add your spouse to the title, he or she will now have an ownership interest in the property. If you get divorced any time after this transfer, the property will be considered community, rather than separate, property.

Commingling of Inherited Property

Sometimes, an inheritance involves a large sum of money. If you deposit this inherited money into a bank account that is separate from your marital fund, the inheritance will easily maintain its status as separate property. However, if you deposit the money into an account with other money that is accessible by both you and your spouse, it will complicate matters upon divorce. This is considered a commingling of your inherited property with marital assets.

Commingling funds can convert your separate property into community property. If  you and your spouse decide to divorce, you will have the burden of proving that the inherited money is still your separate property at the time of divorce.

Call an Experienced Central Valley Divorce Attorney

If you are involved in a divorce proceeding, planning to file for divorce, or are dealing with the aftermath of a finalized divorce, it is in your best interest to consult with an experienced family law attorney to help you learn your legal rights and options with respect to the division of your assets.

For more information or to schedule a complimentary consultation with Central Valley family law attorney Gurjit Srai, please call (209) 323-5558 or (559) 449-1447, or complete our online form.