§ 6.03 Inherited Property

• Jurisdiction: United States
• Publication year: 2021

§ 6.03 Inherited Property

[1]—Importance of Statutory Definition

Almost all marital property states designate property inherited during marriage as separate property. No labor is expected during marriage to acquire such property, so the marital relationship has no claim.¹¹¹

Some states define such property as that acquired by bequest, devise or descent.¹¹² Others refer to it as an inheritance.¹¹³ The precise language can be important. For example, a New Jersey court concluded that property received during marriage via intestate succession was not separate property, since the statutory exclusion only referred to a devise or bequest, not property acquired by descent.¹¹⁴ The New Jersey statute has since been amended to clarify that property received via intestate succession is separate property.¹¹⁵

Wisconsin law has presented interesting issues relating to what constitutes an "inheritance," at least in part because property acquired before marriage generally is divisible at divorce, unless it was received by inheritance or gift.¹¹⁶ In Lang v. Lang,¹¹⁷ the wife was the beneficiary of life insurance on her first husband's life, and succeeded, via her survivorship interest, to certain property held by her and her husband as joint tenants. The wife remarried and then divorced. In the divorce action, she argued that the life insurance policy and the survivorship interest both constituted property received via inheritance, and was therefore not divisible under Wisconsin law.¹¹⁸ The court concluded that neither type of acquisition constituted an "inheritance" under the Wisconsin divorce law, and affirmed the trial court's conclusion that the property could be divided at divorce.¹¹⁹

Property inherited by both spouses can raise the same statutory construction issues presented by gifts to both spouses.¹²⁰ The language of the statute should be reviewed to see whether any guidance is given. For example, the Minnesota statute apparently limits separate property inheritances to property inherited by one spouse.¹²¹

[2]—Determining What Constitutes Inherited Property

Inherited property should be considered separate property only if it is received for no consideration. Inherited property is excluded from the marital partnership because no services were rendered during marriage to obtain the property. If it appears that the property was devised to a spouse in exchange for services rendered during marriage, the rationale no longer applies. This view has been adopted in...