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Is your inheritance marital property in Pennsylvania?

On Behalf of | Feb 17, 2017 | Trust Administration

If you inherit something of value or a large sum of money from a relative, is that yours to keep even in a divorce?

Logically, you might think so. Legally, the best answer anyone can give you without looking into the exact situation is, “Maybe.” This is why.

1) Pennsylvania law is not a community property state. It’s goal is to seek an equitable distribution of the marital assets, which means that it is possible you can keep your inheritance out of the divorce if you kept it from becoming marital assets—but that may be trickier to do than you realize.

2) If it was given to you in an irrevocable trust with provisions that protect it from division in the event of a divorce, it’s probably yours alone. Trusts are often used to keep “family” money or homes in the family, even in the event of a divorce.

3) If you put the money directly into a separate bank account and kept the funds completely apart from marital assets, it is likely to be yours to keep. Similarly, with property, it’s probably yours alone if you inherited it and kept it in your name alone.

However, if you inherit a house and then use marital funds to renovate it, that would put the deed in question. Similarly, if you treat your cash inheritance like a savings account an add more money to it over time that came out of funds you earned during the marriage, the co-mingled funds likely has become marital assets instead of private property.

4) Make sure that tax documents reflect the gift was given to you alone. That’s one way to show that the property or funds were always intended to be yours, not jointly owned.

5) Consider asking for a postnuptial agreement. Once rare, they’ve become more popular as spouses receive large inheritances they wish to protect. It can state that in the event of a divorce the other spouse will forgo his or her rights to any inheritance or gifts given to the other partner during the marriage.

For more advice on how to successfully protect your personal property in the event of a divorce, contact an attorney.

Source: FindLaw, “Pennsylvania Marital Property Laws,” accessed Feb. 17, 2017