Is an inheritance received by one spouse community property?

Asked about 6 years ago - Everett, WA

I live in WA. state and am in the process of inheriting a large sum of money that my grandfather set up in a trust in California. I'm married and would like to know if my wife has any rights to the money if we were to get a divorce.

Also, are there any taxes that will need to be paid on a sum less than $100,000?

Attorney answers (3)

  1. Philip Colin Tsai

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    Contributor Level 7

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    Answered . Generally, inheritance to a spouse is characterized as that spouse's separate property, as opposed to community property. Although Washington is a community property state, inheritance is an exception to the community property presumption. If you do not want the inheritance to be characterized as community property, you will want to keep the funds segregated from your community property so it is not commingled. If you commingle your inheritance by depositing it into a community property account, or open an account in both you and your spouse's name, you may be placing those funds at risk. Remember that all property both separate and community is before the Court for division in a divorce. However, it is rare that the Court will invade one spouse's separate property unless extraordinary circumstances exist.

  2. Elizabeth Rankin Powell

    Contributor Level 20

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    Answered . Hello: First, I am sorry to hear of your loss.

    The trust benefit that your grandfather left you may or may not be separate property (distinuished from community property) depending on the terms of the trust. You can certainly call the attorney who wrote it and ask.

    Washington is a community property state. All property belonging to both parties - husband and wife - is before the court for a just and equitable distribution. You need to tell the court about the inheritance and your wife may not be entitled to it per se, but the Court could determine that she should get a larger portion of another, community asset. If you try to hide it that would not look good to the divorce Court.

    Is this a taxable event for you? Theoretically no, as the income was taxed when your grandfather earned it and it doesn't hit the estate tax level ($100K). That said, you will want to check with your own financial adviser to make sure that you are handling this new income appropriately and to maximize your own tax burden, not make it worse. There is another attorney on Avvo - Doug Lineberry - who may be able to answer this more precisely.

    Hope this helps. Elizabeth Powell

  3. Yale Lewis III

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    Contributor Level 14

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    Answered . if the trust gives the money to you and not to you and your spouse, then it is your separate property. however, to ensure that it remains separate, you will need to keep it separate. set up a new bank account to receive the money, never add any community funds to this account, never pay any expenses related to the acct w/community property money, and it will always be separate.

    however, upon divorce, both separate property and community property is before the court for distribution, so the fact that it is separate won't guarantee that you will get it (but it will help).

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