Keeping Inheritance in the Family After Divorce
- Kendra Hampton
- Aug 20, 2025
- 2 min read
Many parents worry that their child’s inheritance could end up in the hands of a son- or daughter-in-law—especially if the marriage ends in divorce. In California, you can plan to keep assets in the family, but it requires the right legal tools and good communication with your child.
California’s Community Property Rules
California is a community property state. Assets acquired during marriage are generally divided 50/50 in a divorce. However, an inheritance given to one spouse is considered separate property—as long as it’s kept separate.
Problems arise when:
Inherited funds are deposited into joint accounts.
Property is retitled in both spouses’ names.
Inherited money is used for marital expenses without proper records.
Once assets are commingled, courts may treat them as community property.
Trust Planning to Protect the Inheritance
A trust can help ensure the inheritance remains separate:
Distribute assets to a trust for your child’s benefit rather than outright.
Appoint your child as trustee (or co-trustee) with clear instructions to keep assets separate.
Delay outright distributions so the inheritance remains in trust for life or until certain milestones.
This structure can make it significantly harder for a divorcing spouse to claim the inheritance.
Premarital and Postmarital Agreements
Another way to protect the inheritance is through a premarital agreement (before marriage) or a postmarital agreement (after marriage). These contracts can:
Confirm that any inheritance—past or future—will remain your child’s separate property.
Outline how income or appreciation from the inheritance will be treated.
Reduce the risk of costly disputes in a divorce.
Key point: These agreements must meet strict legal requirements under California law to be enforceable. Your child and their spouse should each have independent legal counsel.
Lifetime Gifting with Documentation
If you gift assets during your lifetime:
Provide a separate property gift letter stating the asset is intended only for your child.
Keep the gift in an account in your child’s name alone.
Avoid depositing the funds into joint marital accounts.
Educating Your Child
Even the best planning fails if your child doesn’t follow the rules. Encourage them to:
Keep inherited property in a separate account.
Avoid adding their spouse’s name to inherited assets.
Consult a family law attorney before making transfers.
Your Child’s Choice
Even with strong legal protections, the decision to share an inheritance is ultimately your child’s. Under California law, they can voluntarily add a spouse’s name to property or deposit inherited funds into joint accounts—turning separate property into community property. Your estate plan preserves their right to choose, while making sure that choice is intentional.
Key Takeaway: In California, you can protect your child’s inheritance from a future divorce by keeping it as separate property—using a trust, a premarital or postmarital agreement, clear documentation, and avoiding commingling with marital assets. These tools preserve your child’s right to choose whether to share that inheritance with a spouse.
About the Author
Kendra Hampton has nearly 20 years of legal experience. She manages her own estate planning practice and has helped hundreds of clients create and update their trust, will, and powers of attorney. Kendra is committed to educating clients on the importance of estate planning and crafting personalized planning strategies.