Is Inheritance Marital Property in PA?

In Pennsylvania, marital assets must be equitably divided before the divorce can become final.  The term “equitably” does not mean “equal”. It generally means “fair”. To determine how to equitably divide the assets, the first step is to determine which assets are marital and which assets are non-marital.  Divorce attorneys will often assemble a list of the client’s assets and debts, how they were acquired, how they are titled, when they were acquired, the value of the assets when acquired and the current value. One very common question that arises is if inheritance is marital property in PA, and just how much your spouse if entitled to (if anything at all).

Is An Inheritance Considered A Marital Asset in PA?

Generally speaking, if an inheritance is left to you (and you alone), it is not considered to be marital property subject to division.  This is true whether you received the inheritance prior to or during your marriage. However, if the inheritance is at any time co-mingled with joint funds or used for the common benefit of both spouses, then it may be considered marital property.  Therefore, if one spouse is thinking about divorce, and receives an inheritance, the spouse should keep that inheritance separate and apart from any joint accounts and the inheritance should not be used for marital expenses, such as paying the mortgage.  The inheritance should be kept in a bank account or brokerage account in the name of the recipient spouse.

Is My Spouse Entitled To My Inheritance in Pennsylvania?

Even if an inheritance is kept completely separate from marital funds, if it appreciates in value during the length of your marriage, the appreciated value may be considered a marital asset, subject to equitable distribution.  If your spouse contributes to paying any inheritance tax on such assets or you pay the tax with marital funds, the inheritance may be viewed as marital property in Pennsylvania and be subject to equitable distribution. While it may seem relatively simple to keep inheritance money in a separate account and not use it for the common benefit of the marriage, there is more to it than that.  Aside from having the awkward conversation with your spouse as to why you are keeping it separate and not using it to benefit the marriage, what if the inheritance is not cash, but real property? How can this be held separately? These are the types of questions and issues that experienced divorce lawyers can advise you on.

What If My Inheritance Consists of Real Estate?

If you inherit a house, farm, or condominium, then there are other things you must consider in order to keep it separate from the marital assets.  First, you should make sure that your spouse’s name is not added to the deed. Much like a cash inheritance, if your spouse contributes to the upkeep and increase in value of the real property or you do the same using joint funds, the inherited property may be considered marital property in PA subject to equitable distribution.  Each year property taxes must be paid on property left to you, as well as any homeowner association fees, homeowner’s insurance, etc. If your spouse contributes to paying these fees or taxes or you pay for them with marital funds, the property may be considered marital property and your spouse may be entitled to some equity.

is inheritance martial propery in pa

In An Inheritance Considered Income?

Pennsylvania Courts have held that a spouse’s inheritance is not income because it does not fit within the statutory definition of income.  However, when an inheritance generates investment income, then that income will be added to that spouse’s net income for support or alimony purposes.  The added income could also affect how the Court decides to equitably divide the marital property.

is my spouse entitled to my inheritance in pennsylvania

What If A Spouse Uses Inheritance Money To Invest In Jointly Owned Property?

Generally, when a spouse places an inheritance in joint names or uses an inheritance to buy jointly owned property such as real estate, the Court will consider it to be marital property.  This is considered a gift to the marriage, absent clear and convincing evidence to the contrary. The spouse would have to present clear and convincing evidence that investing the inheritance in the jointly owned real estate was not a gift to the marriage.  Sometimes, a Master or a Court will apply the “vanishing credit doctrine”. The vanishing credit doctrine focuses on the length of time that the contributed property is held jointly and not solely based on the length of the marriage. A short marriage of under one year could result in the spouse retaining all of the contributed property as her own.  A marriage of over 20 years would result in all of the contributed property as marital. When the marriage is between 1 and 20 years, the Master or Court could apply a ratio of to determine the amount to be considered marital.


Call the Martin Law Firm, P.C. today for a free case evaluation at (215) 646-3980.  We can discuss your particular situation and determine how we can help you.

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