Of all the assets that one might acquire over a lifetime, those that are inherited are often the most meaningful. A bequest of a home or money often represents a special bond and hope for the future that were shared with a loved one.
Whether planning to marry or already married, many individuals choose to plan for the future of inherited assets, especially in case something unforeseen should happen to the marriage. Such a plan can help ensure, for example, that a home passed down through the generations can remain in the family and be passed down to a child, rather than divided and sold due to the expense and uncertainty of a divorce.
The Wall Street Journal recently published an article with general advice on how to safeguard an inheritance from a divorce, which included some of the tips below. But because California is a community property state, California residents should pay particular attention to the complexities involved in protecting an inheritance in California.
Consider Maintaining All Inherited Assets As Separate Property
California is a community property state, which means that the courts will divide commingled assets equally between spouses in a divorce. If a home, a car or a bank account is maintained in only one spouse’s name, the court will recognize that as separate property not to be distributed in a divorce.
In The Alternative, Create A Postnuptial Agreement
If you have already commingled assets, or if the idea of keeping things separate is not your style, create a postnuptial agreement that stipulates what would happen to inherited assets in the case of a divorce. If you and your spouse agree that an inherited asset should stay with you, put that down in a formal agreement that a court will recognize.
If inherited assets have already been commingled with joint property, and a postnuptial agreement is not possible, your ability to claim the inherited asset as separate property in a divorce may already be compromised. Nonetheless, with excellent documentation tracing what has become of the asset, an attorney may be able to help you maintain the rights to that asset in some cases.
If Not Already Married, Create A Prenuptial Agreement
Anyone planning to marry who has an important inherited asset should create a prenuptial agreement as a plan to protect that asset no matter what. Prenuptial agreements may seem unromantic, but the discussion can be palatable and even caring when it is seen as a couple’s plan to ensure that each other’s wishes and well-being are taken care of come what may.
Gerald A. Maggio is an experienced Orange County divorce and family law attorney and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.