Inherited property, which is property acquired by bequest, devise, or descent, or property acquired in exchange for such property, is nonmarital property and not subject to equitable distribution between in a Pennsylvania divorce. However, if a spouse commingles inherited property with martial funds which are not held separately from marital assets, the inherited property looses its nonmarital asset character and become subject to equitable distribution between the parties in the divorce. Additionally, the increase in value of the asset during the marriage is subject to equitable distribution between the parties.
Unfortunately, commingling inherited property with marital funds will often result in some or all of the inherited property loosing its nonmarital character. Therefore, it is recommended that a spouse consider placing the inherited property in a separate account. Inheritances are not completely ignored in Pennsylvania divorces though because a party’s inheritance can be considered in the overall equitable distribution of the marital estate.