Inheritance and sole and separate property

Question in a recent consult: I have just inherited money from my father who recently passed. I am married and my husband wants me to open a joint savings account. It is a substantial amount of money and we have been married for 2 years.

Response: You might want to know the law before you make a decision. If you have joint property at the time of a divorce, it will be split 50-50. So, for instance, if you open a joint account, all money in it will be considered community and split 50-50 if you divorce. I know, even if the money came from your father. Another important law to know is that inheritance is your sole and separate property…as long as you keep it separate. The second you convert sole and separate property into community property, it becomes a 50-50 asset. The law protects the money and you make a choice to drop that protection based on what you do with the money. You can keep it separate by putting it into an account with just your name on it or by buying something like a car or house in just your name alone. I always consider that you can gift it to your spouse if you want to but make sure you realize you are giving it away and cannot get it back if you divorce. It is often sad to learn that a spouse often “gifts” an inheritance without realizing it and upon divorce, half of it is lost. Know the difference between community property and sole and separate property. Sole and separate is any property you brought into the marriage, any property gifted to you or any property given to you as an inheritance. Other property acquired during the marriage is considered community property and is split 50-50 upon a divorce. Sole and separate property remains your property even in a divorce.