During divorce, inheritance and trust funds receive different treatment than shared marital property. However, they still require careful management to ensure they remain separate. Understanding your rights and being proactive can make all the difference in securing these assets.
Know what counts as separate property
In California, inheritance and trust funds are typically separate property. This means they belong to the individual who received them, not the marital estate.
However, there are cases where you could combine these funds with shared assets and change their status. For example, depositing inheritance money into a joint bank account or using trust funds to pay for shared expenses may blur the lines between separate and marital property.
To avoid any commingling, ensure you keep detailed records of how you used or stored the funds. A separate account dedicated to inheritance or trust money can help prove you did not mix the funds with marital assets.
Maintain proper documentation
Collect all paperwork relating to the inheritance or trust, such as wills, trust agreements, and bank statements. These documents can demonstrate that the funds were for you alone and were separate from shared finances. Even if you partially used the funds for joint expenses, clear records can help distinguish what remains as your separate property. Additionally, be mindful of any written agreements you and your spouse may have made regarding these assets.
Take proactive steps during mediation
During divorce mediation, focus on clear communication and collaboration. Share evidence supporting your claim that the inheritance or trust funds are separate property. Prepare to discuss how you managed these assets throughout the marriage. Staying organized and calm can help you protect what is rightfully yours while avoiding unnecessary conflict.
Protecting inheritance and trust funds during divorce mediation requires attention to detail and careful planning. By understanding California procedures, you can secure your financial future.