Is My Inheritance Considered Marital Property?
Inheritance Treated As A Gift To The Marriage And Is Marital Property For Equitable Distribution Purposes
In the family law, equitable distribution case of Cowler vs. Cowler, PICS Case No.16-1284 (C.P. Centre, June 26, 2016) two parties in divorce, each with premarital assets from their prior lives, disagreed on the equitable distribution of their marital assets. Married for 13 years, with no children, the parties had rental and other properties between them. Three years before the separation, the wife had invested her inheritance heavily in the purchase of new properties with the alleged expectation that her name would be added to her husband’s premarital accounts. Arguing that her inheritance contributed to the greater part of the marital estate, she sought a 70-30 distribution instead of the 50-50 split desired by the retired husband. The court found that the wife had not sufficiently proved that her investment was not a gift to the marriage, but she deserved some consideration for carrying the bulk of the capital purchases, and awarded her a 55-45 split.
A hearing was held in May 2016 regarding claims for the distribution of the marital assets following their 2014 decree in divorce. Despite attempts to work out the distribution on their own, the parties came to a disagreement on the proportional division of the marital properties. Plaintiff Rosalea Cowler, who had since remarried, sought a 70-30 split of marital property values because she had, in three years before the end of their marriage, invested her inheritance heavily in rental properties which was held jointly. She did so with the expectation that her name would be added to defendant Leroy Cowler’s premarital bank accounts, which did not happen.
The court parsed the situation against the 11 factors of the 3502(a) and noted that the weight assignable to any of them was at the court’s discretion.
The court defined marital property for the proceedings, from 23 Pa.C.S.A 3501(a), as all property acquired by either party during the marriage and the increase of value during that time of non-marital property. The inheritance, left alone, would not have qualified as marital property, but once it was used to invest in jointly owned property, it was. Defendant testified he had expended some of his money on the properties, and he had performed maintenance. The court found that plaintiff did not sufficiently establish that her investment was not a gift to the marriage, and thus the properties had to be treated as marital property. However, the fact that plaintiff made “major contributions to their joint finances less than three years prior to separation” entitled her to some consideration for carrying the bulk of the capital purchases. The court awarded her a 55-45 split, with instructions on splitting any monies left over from the sale of the Florida property and from the accounts designated for the sale of rental properties. The court also awarded defendant’s residence to him in exchange for elimination of alimony.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 39 PLW 1045 (November 1, 2016