If you’re contemplating divorce and you expect to receive an inheritance in the near future, you may be wondering if your spouse will be entitled to any, if not half of your inheritance. This is not only a logical question, but it comes up regularly.
“What if I file for divorce and while it’s pending in the courts, I receive an inheritance? Will my spouse be entitled to it under California’s divorce laws?” is a question that is often asked by divorcing couples. In this article, we explain how divorce impacts inheritances.
Inheritances Are Separate Property
California is a “community property state,” which means that all income, assets, and property acquired during a marriage are considered marital or community property. Under the community property law, each spouse is entitled to 50% interest in marital (community property), however, separate property remains separate.
Separate property is NOT subject to division in a divorce. Separate property includes assets acquired before the marriage, gifts, and inheritances received by one spouse alone during the marriage and property that was deemed separate through a legally-valid prenuptial or postnuptial agreement.
Keeping Inheritances Separate
If you are expecting an inheritance during your marriage or while your divorce is pending, the key is to keep the inheritance separate. Do not comingle the inheritance with marital funds by placing it into a joint bank account, and do not use it to pay for marital property, such as a mortgage or an auto loan, etc.
As long as you keep the inheritance entirely separate and do not let it be placed into a joint bank account or let it be used toward the enhancement or improvement of marital property, it will remain your separate property and it will not be treated as marital property in the event of a divorce.
We hope this article answered your questions about inheritances and how they’re treated in a California divorce. To learn more, contact our firm directly.