Are gifts or inheritance separate property in California?

inheritance separate property California

California is a community property state. That doesn’t mean what some people believe.

Separate property doesn’t cease to exist or magically become community property when a person gets married.

There is a presumption that assets and debts received during marriage are community property.

But the community property presumption may be overcome.

A spouse making a separate property claim can prove the assets and debts are/were separate property.

The separate property then may be awarded solely to the acquiring spouse if the property was never transmuted, legally commingled and spent on non-reimbursable things.

In short, it is possible for separate property to be awarded solely to the acquiring spouse even if it was acquired during marriage.

The burden of proving a separate property claim is on the spouse making the claim.

Family Code section 752 and section 21 of the California State Constitution guarantee and protect separate property during marriage, separation and divorce.

Section 21 of the California Constitution states,

“Property owned before marriage or acquired during marriage by gift, will, or inheritance is separate property.”

California Family Code section 72 provides,

Except as otherwise provided by statute, neither husband nor wife has any interest in the separate property of the other.

California Family Code section 770(a)(2) reads in part,

Separate property of a married person includes…All property acquired by the person after marriage by gift, bequest, devise, or descent.

Bequests, devise or descent are inheritance.

So to answer the question, “is an inheritance separate property?, it could be.

I qualify my answer for a number of reasons.

First, California family law is complex and evolves everyday.

What is or appears to be separate property inheritance at first glance, may not be separate property during divorce.

Second, an “inheritance” is not inheritance if it actually is a “payment for consideration furnished by the transferee spouse during marriage…in which case, if the consideration was community property, then so is the property received in exchange.”

As an example, unless otherwise agreed in writing or pursuant to some exception, if during marriage you cleaned someone’s house in exchange for money or something else of value, “that” money or thing of value given to you by will/trust is likely community property.

In short, your labor during marriage and the fruits of your labor during marriage are presumed to be community property.

A spouse who wants to overcome the presumption and prove the payment is/was his/her separate property, must prove it.

The key to characterizing assets and debts as separate or community is to clearly trace the asset to its source.

If the source of the asset was separate property the asset would remain the separate property of the acquiring spouse unless and until it is/was transmuted (transformed) into, or legally commingled with, community property.

If after all this the acquiring spouse proves the property is/was separate, it will be treated as separate property in the divorce.

BUT there’s a catch.

Proving an asset is/was separate property doesn’t mean the acquiring spouse will receive the asset or proceeds of the asset in the divorce.

It’s possible an asset that once existed is now gone to the acquiring spouse for one legal reason or another.

The acquiring spouse has to show the separate property should and can be returned to him/her in the divorce.

Proving an asset acquired during marriage is separate and can be returned to the acquiring spouse is usually a complex and often lengthy expensive process.

The separate property analysis and production of evidence can be avoided entirely.

If spouses agree, an acquiring spouse can be awarded an asset without requiring any showing of proof.

Like this,

Non-acquiring spouse: “I know your mother gave you that money and I agree it will be returned to you as your separate property in our divorce.”

Acquiring spouse: Thank you. I appreciate your honesty and goodwill.

Case settled.

If you want to know whether an asset is a separate property and who might get it in your California legal separation and/or divorce, I can help you find your answer.

To express your interest in a divorce consulting session or coaching sessions, please complete the confidential form below to schedule a divorce consulting session.


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