Aside from the emotional turmoil, the division of assets is one of the most difficult parts of the divorce process. One of the lesser considered parts of the division of assets are items either spouse gained through inheritance. As such, a commonly asked question by divorcing couples is whether inheritance is considered community property that will be split or separate property that will remain the sole property of the inherited spouse.
Shared Property v. Inherited Property
In most divorce proceedings, property that is acquired during a marriage is considered shared property that will be split equally between the spouses. However, inheritance is an exception. If you inherited any property during your marriage, it will remain protected as your individual property at the time of divorce. This means that you will usually retain ownership. However, as with most legal matters, a few exceptions may apply, as discussed in more detail below.
Exceptions to the Rule for Inherited Property
There are two major ways for your inherited property to go from separate property to community property. One way is if you inherited real estate property and you later added your spouse’s name to the deed. While this would help him or her inherit the property if you passed away, it would also transform the separate property into shared marital property that will be subject to division at divorce.
The second way to transform inherited property in a divorce is you inherited money and deposited it in a shared bank account. As soon as you commingle this inherited money with the rest of our shared money with your spouse, you transform it to community property. As such, at the time of divorcing your spouse, the judge would order you to split the inherited money with your spouse.
Keeping Your Inheritance Yours
There are several things you can use as evidence to prove that the inherited property should continue to be considered separate property. One of the safest ways to keep your inheritance yours in the event of a divorce is through a pre- or post-marital agreement. These agreements will clarify what property should be considered separate and community.
Another way is to save all documentation from banks, tax returns or investment accounts as proof of the intention of the donor to give the gift to only you as inheritance. This will help maintain the assets as separate property.
Call an Experienced Central Valley Divorce Attorney
If you are involved in a divorce proceeding or planning to file for 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.