Accountants and estates attorneys can serve an important role in advising their clients how to plan for their financial futures. One thing to consider is whether the client will be married or divorced. If your client receives an inheritance or gift from a third party while they are married, the client should be advised what to do with the funds. The client, without thinking, may automatically deposit the money into a joint account or use the money for the benefit of the marriage.
However, if the marriage has deteriorated or may deteriorate, then your client should think about what to do with the inheritance or gift in the context of a possible divorce. Generally, marital property means all property acquired by either party during the marriage, regardless of whose name it is in. An exception arises for property acquired by gift (except between spouses), such as an inheritance. 23 Pa.C.S.A. § 3501. The court will only consider the increase in value of the inheritance or gift, unless the money has been co-mingled with marital property. Therefore, If a client deposits their separate property into a joint account or spends it on a joint asset, then the separate property loses its status as separate property and becomes marital property. And if it is marital property, its in the “pot” and will be divided like any other asset.