The topic of who gets inheritance money after a divorce is normally straightforward, as inheritance money and/or property gifted to one person in a marriage is considered that person’s separate property and is not subject to division under the community property laws of the State of California. This would also apply to gifts made to one party by a parent, such as a large sum of money, or property gained by one party due to a death in the family using separate property assets.
Where the topic becomes more complicated are instances of commingling where one person comes into a marriage with separate property assets, such as an inherited home, and one or both persons in the marriage continue to make payments on those assets with income earned during the marriage. All this marital income is considered community property when getting divorced, and any contributions of the community to paying for, improving, or maintaining separate property can be recovered and distributed as community property in a divorce. Most often, community property is divided equally upon divorce, though this is not always the case.
Additionally, if the parties agree in writing and separate property is transmuted to a community property status, that property could be divided equally or apportioned according to separate property or community property interests. This process of changing the status of property is called transmutation, and it can affect both separate property and community property.
The mere fact of a change in the title of ownership for purposes of refinancing separate property could expose the original owner of that property to a transmutation such that the other person is now a one-half owner of the property right from the start of this change.
While the issue of separate property seems fairly easy to deal with at first glance, the other issues of community property contributions and transmutation are complicated legal issues. For these reasons, you should be sure to get an experienced family law attorney to help you. At JWB Family law, asset and property division attorneys, we are well-versed in these topics and give you the seasoned advice and guidance you will need in order to make sound decisions that affect your life now and into the future.