Legal Question in Wills and Trusts in California
New Vacation Home- Is Home Equity Community or Separate
My wife's mom died and she put the $ in a separate trust account with her name only. She's thinking using 50K of the money as a down payment for a vacation property. She wants me to co-sign but I said no (too much liability 4 me). She will purchase under sole prop.
Question: What portion of the property is passed down to her heirs, 100% or only the $50k she used as a down payment?
1 Answer from Attorneys
Re: New Vacation Home- Is Home Equity Community or Separate
As I understand your question, your wife's mother died, and your wife inherited some money. Inheritance is separate property.
She did not comingle the money with any community funds she may have with you (her husband). Therefore, she has maintained the funds as her sole and separate property (SP).
If she alone purchases real property, that real property is her sole and separate property. If she pays the mortgage with her inheritance money or other separate property money, 100% of the property is her separate property. If she uses her income or other community property (CP) to pay the mortgage, then there are apportionment rules that would apply to determine percentage of SP versus CP.
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