CONTRIBUTED CONTENT: Inheriting while married: Is it 'yours,' or is it 'ours?'

When a parent passes away and leaves an inheritance to a married child, a common question follows: does that inheritance belong only to the child, or does the spouse now have a claim to it? The answer depends on where you live and on what you do with the money after you receive it. Idaho is one of only nine community property states, alongside Arizona, California, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. The rules here differ in meaningful ways from the “common law” property system used in most of the country.

The Idaho Rule: Inheritances Start Out as Separate Property

Under Idaho Code § 32-906, most property acquired during a marriage is presumed to be community property, owned equally by both spouses. Inheritances are the key exception. Idaho Code § 32-903 provides that property a spouse acquires by gift, bequest, devise, or descent is that spouse’s separate property, even if received during the marriage.

If your mother leaves you $200,000, that money is generally yours alone and is not divided in a divorce.

The Idaho Twist: Income From Inherited Property

Idaho has an unusual rule that catches many families off guard. Under § 32-906(1), income generated by separate property, such as interest, dividends, and rent, is community property unless the document transferring the property says otherwise or the spouses agree in writing that it will stay separate.

So, if you inherit a rental house, the house remains your separate property, but the rental income it produces becomes community property by default. Most other community property states, including California and Washington, treat such income as separate.

This is why careful wording in a parent’s will or trust matters. A well-drafted plan can specify that income from an inheritance remains the beneficiary’s separate property.

How Separate Property Becomes Community Property

An inheritance does not stay separate automatically. It can lose its protected status through commingling or transmutation. Common examples include depositing the inheritance into a joint checking account and using it for everyday expenses, retitling an inherited home into both spouses’ names, or using inherited funds to pay down the mortgage on the marital home.

In a dispute, the spouse claiming the property is separate generally must trace it back to the inheritance. When funds have been mixed for years, that can be difficult or impossible, and the money may be treated as community property.

How Common Law States Handle Inheritances

In the 41 common law states, property generally belongs to whichever spouse holds title. At divorce, courts apply “equitable distribution,” dividing marital property in a way the court considers fair, which is not always 50/50.

Most of these states also treat inheritances as separate, or “non-marital,” property that is excluded from division. A handful of states, sometimes called “all-property” states, give judges discretion to divide any property owned by either spouse, including inheritances, if fairness requires it. Many also treat passive growth of inherited assets as separate, while growth from a spouse’s active efforts or marital contributions may be marital.

At death, the differences continue. Many common law states give a surviving spouse an “elective share,” a right to claim a percentage of the deceased spouse’s estate regardless of the will, and in some states that calculation can reach inherited assets. Idaho has no general elective share over separate property, though it does provide protections for “quasi-community property” acquired while a couple lived in another state.

Planning Tips for Beneficiaries and Parents

If you receive an inheritance and want to keep it separate, deposit it into an account titled solely in your name, avoid mixing it with joint funds, and keep clear records. A written marital agreement can also confirm that the inheritance and its income remain separate.

If you are a parent planning to leave assets to a married child, consider leaving the inheritance in trust rather than outright. A properly structured trust can help protect the assets from a child’s divorce, creditors, and accidental commingling, while also addressing Idaho’s income rule

Talk to an Idaho Estate Planning Attorney

Whether you are leaving an inheritance or have just received one, a few thoughtful decisions can make a significant difference in who ultimately benefits. An experienced Idaho estate planning attorney can help protect your family’s legacy.

My law firm is currently offering free telephonic, electronic, or in-person consultations concerning probating estates or creating estate planning documents.

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Robert J. Green is an Elder Law, Trust, and Estate Planning Attorney and the owner of Kootenai Law Group, PLLC in Coeur d’Alene. If you have questions about estate planning, probates, wills, trusts, or powers of attorney, contact Kootenai Law at 208-765-6555, [email protected], or visit www.KootenaiLaw.com.

This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.