How to Protect Your Inheritance From Your Spouse

Protecting Inheritance From Spouses in California

In California, inheritance is considered separate property. Here’s how to protect your inheritance from your spouse in California.

As separate property, inheritance is not shared by both spouses in California. However, certain actions can make an inheritance become community property, therefore it is important to be aware of what actions one can take to protect their property.

Is inheritance considered to be community or separate property in California?

Community property refers to property that is acquired by either or both spouses during the course of a marriage. Income, real estate, and more fall under this category, and must be split evenly (according to their value) if a divorce takes place. However, some exceptions exist and can qualify certain assets as separate property. These exceptions include gifts and inheritances that are meant for one spouse. Under California law, both property inherited prior to marriage and during marriage are considered and treated as separate property. Thus, in the case of a divorce, inheritances are typically solely owned by the inheriting spouse.

What actions can make an inheritance become community property?

Transmutation

Transmutation involves inherited property becoming community property as a consequence of property ownership being assigned to the other spouse. An example of this can include the inheritor of a house adding their spouse’s name to the house. This would make both spouses have an ownership interest in the property, therefore making the house community property. If a divorce were to take place, the inherited house would no longer be treated as separate property.

Commingling

Commingling involves inherited money being used for community property. Commingling funds change inherited money from being separate property to community property. An example of this could include the inheritor of the money putting their inherited money into an account that both spouses share. In this case, it may be difficult for the court to determine separate property from a shared account. Thus, it can be advantageous for a spouse to place inherited money into a personal account that does not include marital funds.

What steps can be taken to protect an inheritance from a spouse?

Some steps that can be taken to protect one’s own inheritance from a spouse include:

Opening a personal account for the inheritance and having evidence that the inheritance was deposited into the account
Keeping records of assets purchased with solely inheritance money
Not using inheritance to purchase a residence that will host both spouses
Not using the inheritance to pay off joint debt
Not using inheritance money to upgrade a shared home
Not using inheritance to upgrade a wedding ring
Not depleting the inheritance

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If you have any more questions on how to protect your inheritance from your spouse in California, contact us. Get your free consultation with one of our California Property Division Attorneys in California today!