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Inheritance- A Nonmarital Asset

Property acquired by inheritance is a nonmarital asset, however, some or all of it may lose its character as nonmarital.

A recent client had inherited a sizeable sum of money during the course of a marriage. A marriage that was now ending. The good news is that property (money, real estate, etc.) acquired by bequest, devise, or descent, or property acquired in exchange for such property, is nonmarital property.

However, when the asset is commingled with marital funds and not held separately from marital assets, it loses its character as a nonmarital asset and becomes subject to equitable distribution. Further, the increase in the value of the asset during the course of the marriage (date of marriage to date of separation) is subject to equitable distribution.

For example, a certificate of deposit is marital property where a husband inherited it from his father and added that amount to joint funds to purchase a new home. It is commingled with marital funds and forever loses its character as a non marital asset. Even doing something such as placing the funds into a joint account, constitutes commingling of the inherited asset. The best solution to avoid this problem is to open a separate account in your own name.

If you have questions concerning the division of a marital or nonmarital asset you may contact Shaffer & Engle Law Offices, LLC (717) 268-4287.