What Happens to Inheritance in a Divorce: Washington Law on Separate Property

Posted on September 27, 2023.

Dividing assets during a divorce can be legally complex. The process requires careful consideration of many factors, including the duration of the marriage, the source of the assets, and Washington state laws. Among these valuable assets, inheritance can often form a significant portion of a couple’s wealth. 

The question arises—is inheritance treated as community property to be divided equally, or is it considered separate property belonging solely to the beneficiary? This blog aims to shed light on this matter. 

Understanding Community Property in Washington State

In Washington, there are two main types of marital property—separate property and community property. How inheritance is treated depends on which type of property it is classified as.

The property division in divorce in Washington operates under a community property system. This means that assets and debts acquired during the marriage are considered community property and are subject to equal division between spouses by default. 

However, there is an important exception to this rule—separate property includes assets acquired before the marriage, after the date of separation, and inheritances or gifts received during the marriage. It is crucial to note that inheritances are generally classified as separate property, which means they may not be subject to division with your spouse.

Maintaining the Separate Status of Your Inheritance

While Washington State law treats inheritances as separate property, it’s crucial to take specific steps to preserve their separate status: 

  1. Keep It Separate: Ensure that your inheritance remains separate property by keeping it apart from marital assets. This means taking measures such as avoiding depositing inheritance funds into joint bank accounts or using them for joint expenses.
  2. Document Your Inheritance: Keep detailed records of your inheritance, including any documentation proving the source and nature of the inheritance. This document can serve as evidence in case your partner raises a concern or disputes the status of the inheritance.
  3. Avoid Commingling: Be mindful about commingling your inheritance with community property. For instance, if you decide to invest your inheritance funds into substantial enhancements for your marital home, the resulting increase in its value might be seen as a contribution to shared assets.
  4. Consult a Lawyer: Divorce cases can be intricate, and enlisting the help of a skilled attorney will ensure that your inheritance remains safeguarded. 

Exceptions to Separate Property Status

While inheritances are typically treated as separate property, there are scenarios where exceptions may arise:

  1. Intentional Gifting: If you intentionally gift your spouse a portion of your inheritance, it could lose its separate property status.
  2. Commingling: As previously mentioned, commingling inheritance funds with community property can transform it into community property.
  3. Mixed Use: Determining the portion that remains separate can be challenging if you utilize your inheritance for both separate and marital purposes.
  4. Co-Mingled Investments: If you invest your inheritance funds alongside marital assets, sorting out the separate portion can become complicated.

A Closer Look at Commingling

At Truce Law, we cannot stress enough how important it is to be wary of commingling. Under Washington’s community property laws, inheritance can be divided in divorce through commingling. This happens in several ways, including:

  • Inheriting a large sum of money and depositing it into a joint account
  • Using inheritance money to pay community bills, like a mortgage or car payment
  • Inherited assets like cars or real estate also often become commingled
  • Inheriting a home wherein you subsequently add your spouse’s name to the deed

We advise that you declare all assets in a divorce, whether separate or joint. In cases like commingling, the court may decide that an item has lost its separate status. This means that inheritance has become community property and is, therefore, divisible.

Options for Safeguarding Your Inheritance

To safeguard your inheritance during divorce, consider the following options:

  • Prenuptial or Post-Nuptial Agreement: If you anticipate receiving or have already obtained an inheritance, discussing a prenuptial or post-nuptial agreement with your spouse can clarify how these assets will be treated if a divorce occurs.
  • Trusts: Placing your inheritance in a well-drafted trust can help preserve its separate property status. Within a trust agreement, you can specify the intention for the assets to remain separate property.
  • Mediation or Collaborative Divorce: Opting for mediation or collaborative divorce processes can offer more flexibility in negotiating asset division. This approach allows you to safeguard your inheritance while working cooperatively with your spouse toward reaching a mutually agreeable settlement.
  • Legal Counsel: Seek guidance from a knowledgeable attorney in divorce and family law. They can assist you in navigating the complexities of property division and ensure the protection of your inheritance.

Why Hire a Lawyer

Even the most amicable couples should consult an experienced family law attorney when dividing wealth. Divorce requires navigating a complex legal landscape and understanding state laws governing separation and property division. 

A lawyer can provide invaluable assistance in determining whether an inheritance is deemed separate or community property. It might remain separate if the inheritance was received during the marriage, but kept separate (not used for shared expenditures or combined with shared assets). 

However, the distinction can get blurred if the inheritance was commingled with marital funds or used for the benefit of both spouses. Here, a lawyer’s experience is critical to protect your rights. Moreover, they can guide you through possible disagreements over the value of the inheritance and represent your interests if the case ends up in court. 

 Keep Inheritance as Separate Property with the Help of a Family Attorney

Receiving an inheritance can be a significant financial boost, and knowing how to protect it during a divorce is critical. Certain factors, such as commingling and intentional gifting, can complicate the status of your inheritance. To secure your assets, it’s best to consult a lawyer.

At Truce Law, we have extensive experience navigating the intricacies of divorce and inheritance laws. If there is any doubt about classifying inheritance as separate property, our attorneys can provide invaluable guidance on how to best protect your interests.

Contact us for a consultation today. We have offices in Seattle, Tacoma, and Olympia.

Testimonials & reviews
If you are still able to work together and looking to part ways amicably, then I suggest giving Truce Law a call. Save time, headaches, and money.
Jeremy R
Lynnwood, WA
Not only was I kept informed with updates throughout the process in a timely fashion he consistently offered a caring and patient approach.
Cevon R
Seattle, WA
Exactly what and who I needed to help me. He is very knowledgeable, professional and the attention he gave me was unprecedented.
Bart E
Bellevue, WA