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$50000 down payment on first home came from spouse's inheritance is this now community property?

Sacramento, CA |

Two years into the marriage my spouse and I purchased our first home; she chose to have a relative purchase 1/2 of a house she had inherited upon the death of her father. Roughly $50,000. We are now in our second home after 19 years of marriage. Is this now community property? As it was used as a down payment for property we held joint title to?

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Attorney answers 1


Although factual details are critical to an accurate and complete answer to this question, generally, if your spouse took money from a separate property source (like an inheritance) and applied it to purchase a community property asset (like a house) AND the purchase was after 1/1/84, then, while the house is community property, your spouse has, at the time of a dissolution of marriage, a right to reimbursement of his separate property contribution, dollar-for-dollar, from the undivided equity, without interest or appreciation, and the community divides what's left.

For example, if H puts in a $50,000 down-payment from his separate property, and at the time of the dissolution, the net fair market equity in the house is $200,000, H is entitled to be reimbursed his $50,000 off the top, and the parties then equally divide the remaining $150,000; H gets at total of $125,000 (50+75) , W gets $75,000