What happens to an inheritance during a divorce?

Getting an inheritance from a wealthy relative can be a significant financial windfall for a California resident. Depending on the size of the inheritance, the beneficiary may be able to set up for retirement, buy a second home, or invest in lucrative financial options. When an inheritance benefits a single person, they may have ultimate control over how they manage and spend their bequest. If they are married, they may have questions about if and how they have to share it with their spouse.

Inheritances and ownership through marriage and divorce

An inheritance from a decedent’s estate passes to a named party or specifically named parties. A married person may receive an inheritance in their individual capacity if that was the intent of the decedent, or they may receive it with their spouse. If they receive it as an individual, that inheritance is considered their separate property.

In California, property may be classified as separate or marital. If it is separate, then the owner of the property retains it in the even that they divorce their spouse. If the property is marital then it is subject to division under the state’s community property laws.

As readers can probably see, shared inheritances can be significantly depleted if they are deemed to be marital property during the divorce process. The comingling of separate property with marital property or converting separate property into marital property during a marriage, may render an otherwise separate inheritance as marital property in the event of divorce.

Getting help with complex financial divorce questions

Inheritances are just one financial topic that can significantly complicate the outcomes of high asset divorces. When individuals have concerns about their property, their earnings, and their future financial interests, it is important that they work with legal professionals that know and understand the true stakes of their divorces. This post offers no specific legal advice and all high asset divorce questions should be directed to knowledgeable California divorce attorneys.