Is My Inheritance Considered Community Property in Orange County?

What happens to my inheritance in my divorce? This is one of the most frequently asked questions we hear from clients in Orange County. Many people find Orange County property division laws to be particularly confusing. Inheritances are usually separate property. However, there are many ways inheritances can get commingled with community property. You may be wondering, “Is my inheritance considered community property in Orange County?”

About Minyard Morris

At Minyard Morris, we have been practicing exclusively in Newport Beach, Orange County divorce cases for almost half a century. We know the judges, , court practices, and the nuances of Orange County family law in ways differently than other family law firms that lack in depth local knowledge. With 20 attorneys and more than 350 years of collective experience, we meet weekly to discuss and strategize our approach to the most complex matters.

Orange County divorce cases are filed and heard in the Orange County Superior Court, Lamoreaux Justice Center, in nearby Orange, which is the main courthouse in Orange County that hears family law cases and at the Santa Ana courthouse. We believe in fighting for you, your property, and your future.

Separate Property vs. Community Property

Couples in the United States see a fair share of divorces. The CDC reported 2,041,926 marriages in the United States. This resulted in a marriage rate of 6.1 per 1,000 population. In this same report, there were 672,502 divorces in the United States (45 states, not including California) and a divorce rate of 2.4. The divorce rate in Orange County is higher.

Orange County community property and separate property laws are enforced by the family law courts. Community property includes most assets or debts acquired during the course of the marriage. It is equally divided in the event of a divorce.

Separate property is anything acquired before the marriage and includes all gifts and inheritances given specifically to one spouse. Inheritances remain separate property according to the law, but the marriage management of assets blurs this distinction.

What Happens to Inheritances

Inheritances remain separate property if they are not commingled with community property and are kept in the name of the spouse who received the inheritance or can be “traced.” For instance, if you receive an inheritance from your father and you deposit it in a bank account in only your name on it, that inheritance will likely remain your separate property.

The same holds true for real property. If you inherit a house and do not put your spouse’s name on the title, then the house will probably be deemed your separate property. However, there are nuances that complicate the issue.

Difficulties occur when an inheritance is commingled with the community assets. If you deposit inherited funds into a joint account and use them to pay household expenses, or if both spouses contribute to the maintenance or improvements of inherited property, the court may consider at least a portion of that inheritance as community property.

In these cases, it is essential to trace the source of funds to prove that portion which should remain separate, if there is adequate documentation.

Litigation in Inheritance Questions

Many beneficiaries want to use their inheritance for family purposes, such as a down payment on a family home or major purchases. Such generous gestures are often made at the expense of the benefactor and can make divorce more difficult and costly.

When inheritance funds are used to acquire property, the contributing spouse may have a claim for reimbursement. However, the contributing spouse may not recover the entire amount in property division cases. The court will perform an extensive analysis to determine whether separate and community funds used for property acquisition can be traced to the source. The court will perform an extensive analysis, which often requires the skills of a forensic accountant, to determine whether separate and community funds used for property acquisition can be traced to the source.

Inheritance is one of the most contested property issues in Orange County divorce. Because an inheritance is not as easy to identify and quantify as a community asset, like a paycheck or a bonus, it may require detailed analysis to determine whether the property was commingled or if a spouse is entitled to reimbursement. Such issues can involve professional witness testimony and financial tracing, which are also common when dealing with other hard-to-value assets like a family business or digital currency.

Hire a Property Division Lawyer

Don’t risk your inheritance. When you hire an Orange County property division lawyer, you receive professional representation that can defend your separate property rights. A family law attorney works to oppose inaccurate property characterization and understand local judicial tendencies in Orange County. Your well-earned financial future or family-inherited assets require and deserve protection to maintain their value.

FAQs

Is Inheritance Considered Community Property in California?

No, inheritances are not considered community property in California. This means they are separate property belonging only to the spouse who received the inheritance. However, if the inheritance becomes mixed with marital assets, such as being placed into a joint account or used to purchase a residence, it may lose its separate character and be subject to division upon divorce.

Does My Spouse Get Half of My Inheritance?

No, your spouse does not automatically get half of your inheritance. Inheritances are generally considered separate property in California, meaning that they belong to the spouse who received them, and they are not subject to division in the event of a divorce. However, if the inheritance becomes commingled or mixed with community money, this could put the inheritance at risk of being split in a divorce.

How Do I Protect My Inheritance From Divorce in California?

To protect your inheritance in a divorce, do not use it on community assets, such as a family home or business. Deposit the money into a separate account, and do not use it for marital purposes. Maintain good records of all transactions. When inheritance is real property, do not title it in the names of both spouses. An Orange County property division family law attorney can help you establish claims for tracing and reimbursement to protect your rights.

What Is Excluded From Community Property in California?

Typically, assets and debts that are excluded from community property in California include inheritances, gifts to one spouse, property acquired before the marriage, assets acquired after separation, and certain debts, such as illegal gambling debts or those that stem from an extramarital affair. However, commingling of funds or using separate property for community purposes can impact its classification.

Contact Minyard Morris Today

If you are going through an Orange County divorce and have inheritances that you want to protect, contact Minyard Morris today, and we can help you protect your assets. We can help you safeguard what is yours.