Protect Your Inheritance From Your Ex

“Is my spouse entitled to my inheritance if we get a divorce?”

In my estate planning work, I get this question a lot. The simple answer is no – your inheritance belongs to you and you alone. But only if you’ve kept it separate from your combined assets.

Keep it Safely Separate

When it comes to protecting your inheritance, a good rule of thumb is KISS, or “Keep it Safely Separate.”

Before discussing inheritances, let’s back up and review the basics of how assets are divided in a divorce. In marriage, property generally falls under one of two categories: community property and separate property.

In community property states like California, marriage is viewed as a partnership in which both spouses share assets equally, and divide those assets upon divorce. Assets obtained during the marriage such as the marital home, joint bank accounts, wages, and items purchased using marital funds are considered community property.

However, some property is considered separate. For instance, if you receive an inheritance or gift — either before or during the marriage — it is considered separate property and belongs solely to you; your spouse has no claim to it. That is, unless you shared it or combined it with marital assets.

Thou Shalt Not Commingle

If you combine separate property, such as an inheritance, with marital property, it is said to be “commingled.” Commingling separate property converts it into community property and thus subjects it to division. For example, if you receive an inheritance and deposit it into a joint checking account or use it for a joint purchase, or to buy a house in which you both live, it will likely lose its separate nature.

The best way protect an inheritance is to deposit it into a separate bank account that is in your name only, and avoid depositing any marital funds into this account. Keep it Safely Separate. This goes for the whole inheritance. If you share any portion of your inheritance with your spouse, he or she can claim that you intended to share the entire inheritance, and it will be up to you to provide evidence in court that the inheritance was not meant to be shared.

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