Is it a gift or an inheritance? Does that matter?
We often hear these questions during divorce proceedings, and there’s a good reason. The answer impacts how the courts view certain assets and thus how they are divided. It’s easy to see why you need to have this information.
Rick Jones, one of our managing partners, regularly appears on the Danny Bonaduce and Sarah Morning Show, where he answers family law questions from listeners. On a recent episode, a caller posed this exact scenario.
Caller: “I’m married. Say my wife got a ‘gift’ but it’s called an ‘inheritance’ even though her parents are still alive. Is that an actual ‘gift’ or is it really an inheritance?”
Gift or Inheritance? Listen to the answer below:
Rick: “Well, what’s interesting about this is that it probably doesn’t matter. We all hear about ‘community property,’ but that means there’s also something else called ‘separate property.’
“Separate property is things that are excepted from what’s considered the community property pool, and they are very specific.
“One of them is ‘inheritance’ and the other is ‘specific gift’.”
Danny: “So either way, that money is protected?”
Rick: “The key though is this: Usually, at least with this inheritance, you’ve got the document. You’ve got the will that says, ‘I give this to you,’ my daughter. Not ‘my daughter and her husband.’ So at least there’s proof this way.
“In terms of a gift, there may or may not be proof. If they’re wise, they’ve already labeled this and called it a gift. The fact that they’re obviously still alive means they can go back and correct it as well. In other words, they would be the first witnesses saying, ‘Oh no, that was a gift to her.'”
Danny: “That’s a gift to her, you’d have to pursue that. If she didn’t want to give it to you, she’d win right?”
Rick: “Right.”
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