Client Alert

Could my husband walk away with half of my inheritance?

You and your husband tried to make your marriage work for as long as you could. But after several painful years, you are ready to divorce. There are several questions running through your mind about your children, your home and your finances.

One of the most important financial questions that you will have to consider is what will happen to your inheritance. Many women in Silicon Valley who have received a sizeable inheritance fear that their soon-to-be ex could walk away with a large chunk–maybe even half–of their inherited assets.

What will happen to my inheritance?

The fate of your inheritance in a divorce depends largely on whether you kept it as separate property or commingled it with your partner’s finances. If you have kept your inheritance separate, then it can remain with you. However, if you have commingled assets with your partner, it may be in jeopardy. The finances that you and your partner mixed are considered marital property. Separate property is protected from division in a divorce, but marital property is not. Any of your inheritance that is considered marital property could potentially be split 50-50 with your husband in the divorce decree.

Divorce and inheritance in California

States follow one of two laws when it comes to divorce. Some states follow equitable division laws, meaning that assets are divided equitably in a divorce. Assets can be divided proportionately based on factors like each partner’s income and the length of the marriage. But California is a community property state. This means that in a divorce, all marital property be divided equally between spouses. Any bank accounts, assets and property that the state considers marital property may be divided in half.

This means that your husband may walk away with half of the portion of your inheritance that you shared with him. If this is your case, there is no need to panic: You still have legal options. You may be able to protect your inheritance from being divided with your spouse. During your divorce, you will need to fight for your own financial best interests–and that means fighting for your inheritance.

Posted in Client Alert, Estate Planning.