If I’m sued in a car accident, can they take the house if the title is only in my wife’s name because she purchased it with her inheritance?

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If I’m sued in a car accident, can they take the house if the title is only in my wife’s name because she purchased it with her inheritance?

This has been the case since the time of purchase. And what about her money in the bank? I live in a community property state.

Asked on August 5, 2014 under Bankruptcy Law, California

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

Community property is property acquired during marriage.  Community property also includes income during marriage.  Each spouse has a one half interest in the community property.

Separate property is property acquired before marriage or after the marriage ends. Separate property also includes income earned before marriage or after the marriage ends.  A spouse has no claim to the other spouse's separate property.

The inheritance is your wife's separate property regardless of whether the inheritance occurred before or during marriage.  If the house was purchased with only separate property funds from the inheritance, the house is your wife's separate property and someone suing you for an auto accident would not have a claim to the house.  

If the money in your wife's bank account was earned during marriage, it is community property and someone suing you for an auto accident could go after the funds in the bank account because they are community property.  If the money in the bank account was earned before marriage, then those funds are your wife's separate property and the creditor would not have a claim to those funds in a lawsuit against you for an auto accident.  If some of the funds in the bank account were earned during marriage and some were earned prior to marriage, there would be an apportionment between community property and separate property.  Only the portion of the funds that are community property would be subject to a claim from the person suing you in an auto accident.

If you are sued in an auto accident, your auto insurance company will provide you with an attorney at no cost to you.  If there is a judgment against you which exceeds the policy limits of your auto insurance policy and the judgment is an amount which you cannot afford to pay, it would be advisable for you and your wife to file bankruptcy.


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