Are you contemplating divorce, but at the same time you’re anticipating an inheritance in the near future? If so, you may be worried about your spouse getting their hands on your inheritance, and this is a perfectly normal concern to have. Often, we hear clients ask us, “If I receive an inheritance while my divorce is pending, will my spouse be entitled to half of it under California’s community property laws?”
Under California’s community property laws, the assets and income earned and acquired during a marriage belong to both spouses equally, regardless of who earned it or which spouse’s name is on the title – except for gifts and inheritances and property kept separate through a prenuptial or postnuptial agreement.
You Have to Keep the Inheritance Separate
If you receive an inheritance during your marriage or while your divorce is still proceeding through the court, the key to keeping it yours and not subject to division is to keep it separate. Do not deposit the money in a joint bank account and do not use the money to pay off marital debts. Also, don’t use the money to enhance the marital property, for example, don’t use it to renovate the marital residence or a vacation home.
If you comingle the inheritance with marital assets, it can for divorce purposes, become a marital asset, so you want to take the necessary steps to protect that money and keep it separate. If you have any questions and you’re anticipating an inheritance while your divorce is pending, you can contact an attorney from our firm about it.
Also, any property purchased with an inheritance that is kept separate is also considered your separate property. So, if you were to deposit your inheritance into a separate bank account and buy a boat, an RV, an automobile, or something else of value with proceeds from the inheritance, that purchase would remain separate property in a divorce.
Next: Are Gifts Separate Property?
We hope this article helped clear up the issue of how inheritances are divided in a divorce. To schedule a free consultation, contact Cage & Miles today.
