Does inherited property become community property?
California is a community property state, which means that couples divide marital property 50/50 when they divorce. Marital property is property that a couple jointly owns, such as a house or car that they purchased together, titled in both of their names.
One of the main challenges with property division is determining what property is marital—sometimes called community—property and what property is separate, belonging only to one spouse.
Characterizing inherited property
In California, the Family Code contains the statutes that govern how CA property division occurs. Div 4 Part 2 section 770 CA Family Code defines separate property, stating that “all property acquired by the person after marriage by gift, bequest, devise, or descent is separate property.”
Clarification of some of these legal terms might help:
- Bequest refers to disposing of personal property and money in particular through a will
- By devise refers to real property inherited through a will
- By descent refers to inheriting property from a relative who died intestate (there was no will)
At first glance, this seems fairly simple. Inherited property is separate property and not marital property. By and large this is true. However, there are situations where inherited property could become marital property.
Commingled assets
The legal definition of commingling is the act of mixing the funds belonging to one party with those of another party. Whether inherited property is separate or marital becomes complicated in California when funds are commingled. Say for example, that one spouse inherited a house, sold it and put the proceeds in a joint bank account shared with the other spouse. The funds at this point become commingled.
Chief Justice C.J. Traynor of Supreme Court of California in the case of Laurance A. See v. Elizabeth Lee See concluded that if you cannot trace funds used for acquisitions during marriage to their source, then the presumption is that the acquired property is community property. A Riverside divorce lawyer can tell you that, once a spouse commingles property, that spouse is responsible for keeping accurate records to show what aspect of the property is community and what is separate.
The best plan is not to commingle property that you want to keep separate. When this occurs—and ultimately whenever you are dealing with property division—an experienced divorce lawyer can offer valuable legal guidance.
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