What Happens To Inherited Or Gifted Property During A Divorce?

community property

There are many questions that come up when considering divorce. It’s a stressful time on many levels, not the least of which is an unknown future. How will the community property be divided? How does the law decide on the complicated details? A particularly emotional topic that can present complications is that of inheritance.

If something was gifted to someone, it continues to belong to that person after a marriage is dissolved, right? The answer to that question is, it depends. Bruce Mandel’s family law office can reduce your stress and deliver the information and assistance you need.

What To Do If You’ve Just Received An Inheritance

Whether or not you know the outcome of your marriage, it is a good idea to put the money from an inheritance into a separate account. A joint account complicates matters of ownership.

In addition, what you do with the money from that account matters also. It is best not to use it for family or co-owned obligations if you want to maintain clear ownership. For example, if you use it to pay the mortgage of a house, you co-own with your spouse, or on family bills, it becomes less clear who owns the account.

When it comes time to divide assets, the named owner of the inheritance must prove they didn’t plan to share the assets. You may not want to name your spouse as a beneficiary of the account if you aren’t sure if you will stay married.

Is My Inheritance Considered Separate Property Or Community Property?

Separate property is owned by one spouse only. Community property is owned by both spouses and will need to be divided by either the owners themselves or the courts.

Two criteria matter when it comes to how your inheritance is defined by the law and who it belongs to after the divorce- the intent of the giver and what was done with the inheritance during the marriage.

The will of the person who gave the inheritance needs to clearly specify that it is meant for one person. If the meaning is ambiguous or clearly shows intent that the real estate or money is meant to benefit both people, then one person can’t claim it as their own.

The inheritance can begin as separate property and change its status during the course of a marriage. California is a community property state. This means that community property belongs equally to both parties. However, the division is complex and is not necessarily a 50/50 matter.

If a couple can’t decide on how to divide it, a court will decide for them.

When, for example, an inherited house is rented out, and the subsequent funds are used for family expenses, then regardless of the intent of the giver, the property becomes community property. Sometimes it’s just too complicated for a couple to fairly wrangle the outcome.

Examples Of Situations Where Separate Property Becomes Community Property

Your aunt leaves you $100,000 before you are married. Once you got married, you began investing the money in a property with your spouse, which you then rented out. With the proceeds from the rental, you paid bills both of you were both responsible for.

Your spouse’s father leaves him 2 of their rental properties in their will before you are married. Once you are married, you decide to sell the properties and use the money to place in a joint account.

Talk To Bruce Mandel’s Law Office Today About Your Community Property Issues

Everyone’s situation is unique, and questions nearly always come up. It is wise to consult an experienced attorney, so the law is followed, and you end up getting what is rightfully yours. Contact Attorney Bruce Mandel for a expert consultation at 424-250-9130. Follow us on Facebook for quick access to our information when you need it.

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