Inherited money during a divorce

#1

Hi Cristin,
My question is ~ during our marriage, my husband inherited money & used it to pay down our home mortgage. Is he entitled to receive that money back in our divorce?
Thank you for your help!

#2

Hi there,

So let’s go through a few of the legal points needed to answer your question:

  1. In general, anything acquired during marriage is presumptively community property according to Family Code Section 760. One of the exceptions includes inheritances, which, under Family Code Section 770, is separate property.

  2. Family Code Section 2640 deals with the reimbursement portion of your question. Separate property funds that went towards ACQUIRING property (which includes payments that reduce the principal balance of a loan) can be reimbursed IF the person requesting reimbursement can “trace” the source of the funds. That means that your husband must prove that the money that went towards paying down the principal balance of the loan came from his separate property inheritance. If the money was mixed in with money acquired during marriage (such as paychecks), it becomes much more difficult to trace. Additionally, payments towards property taxes, utilities, and mortgage interest do not count towards “acquiring” property.

Hope this helps!

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