When you are going through a divorce in Pennsylvania, you might wonder what happens to property you inherited from a loved one. The good news is that Pennsylvania law generally treats inheritances differently from other marital assets. However, there are important nuances you need to consider.
Understanding marital versus separate property
Pennsylvania follows the principle of equitable distribution, which means the court divides marital property fairly between spouses during divorce proceedings. However, inheritances typically fall into a special category. When you receive an inheritance, the law considers the initial value of the asset as your separate property. However, the law considers any increase in the value of that inheritance during your marriage as marital property. The court subjects this increase to equitable division.
The key factor is that the inheritance must have been given specifically to you alone. Not to both you and your spouse together. For example, if your grandmother left you her house in her will, that property should remain yours after the divorce. The same principle applies to gifts you received from family members during the marriage.
When inheritances might become marital property
Even though inheritances start as separate property, they can transform into marital property through a process called commingling. This happens when you mix your inheritance with marital assets in ways that make them indistinguishable.
For instance, you might have deposited inherited money into a joint bank account. You and your spouse use this account for household expenses. You might lose its protected status. Similarly, you might use inherited funds to improve the marital home. Or you might invest them in jointly-owned assets. You could be creating a situation where your spouse has a claim to those funds.
To protect your inheritance, consider keeping it in a separate account under only your name. You might also want to avoid using it for joint expenses or investments. Documentation is also crucial. It might help to maintain clear records showing the source of the funds and how you have kept them separate from marital property.
If you are concerned about protecting an inheritance during divorce proceedings, understanding your rights and options, as well as Pennsylvania’s equitable distribution laws, would be a wise step to take.