Dear Len & Rosie,
I have been married for more than two years. My parents have died recently, and I have inherited their home. I want to remodel the house with money that I had saved up prior to getting married. If I do any remodeling work with my own money, does the house become community property? What can I do to make sure that it doesn't? Also, if I put more money into the accounts that I had prior to marriage, do those accounts become community property?
The basic rule of marital property is simple. Everything either you or your husband acquire during your marriage as a result of your labor is community property owned equally by both of you. And naturally, everything you acquire with community property is community property. Your separate property consists of everything you owned prior to your wedding, and anything you may receive as a gift or inheritance.
So the home is yours, and yours alone. But you can change that, either on purpose or by mistake. It is perfectly OK for you to take your separate property savings and remodel your home. That's using separate property to improve separate property, so there's no harm in doing that.
What you have to be careful about is mixing up community property with separate property. Your paycheck is community property, and so is his. If you deposit your paycheck into the accounts that hold your separate property savings, then you have commingled assets. Doing so does change your separate property inheritance into community property half owned by your husband. What it does mean is that if you and your husband were to get divorced, the burden of proof would be on you to show what portion of the commingled funds is 100% yours.
If you use community property to remodel your home, the home will still remain your separate property. Mostly. If you divorce, your husband will have a community property claim against part of the property, roughly corresponding to the community property used to fix up the home.
So be careful. Keep your separate property separate. Keep anything you owned prior to your marriage and your inheritance within accounts that are completely segregated from anything you and your husband own and you should be safe.
Len & Rosie
Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at (707) 996-4505, or on the Internet at www.lentillem.com. Len also answers legal questions each weekday, 3-4PM on Newstalk910AM.