Should you accept money from your parents during your divorce?

When facing the financial strain of a divorce, accepting money from family might seem like a helpful solution. However, this can be risky, especially in a community property state like California.

Knowing about the possible hazards can prevent divorce and marital property complications if you take the money your parents offer.

How is accepting the money risky?

In community property states, assets acquired during marriage are considered joint property and subject to 50/50 division upon divorce.

Unless the money your parents give is clearly documented as a gift for you exclusively, it will be counted as marital property and split between both spouses. Taking a few steps can shield the gift from property division.

• Have a written agreement between you and your parents stating that the money is a gift to you separately and not to both spouses.
• Deposit the money into a separate bank account solely in your name to avoid mixing the funds with marital assets.
• Keep clear records of the transaction, including any correspondence (emails, texts, etc.) with your parents about the gift.

Another risk is that the gift could increase your income, potentially impacting alimony and child support calculations. You may end up receiving less or paying more in support, depending on where you stand, due to the gift.

Although a financial gift can provide economic relief during a divorce, knowing the possible risks can help you decide whether to accept or decline.  A legal representative can help you make this decision and offer guidance on using gifted money in a way that does not threaten your divorce position.