Is Inheritance Marital Property in Delaware?

If you've received an inheritance during your marriage and are now facing divorce, the first question is whether it's protected from division. Under Delaware law, the answer is: it depends on what you did with it.

The Default Rule: Inheritance Is Separate Property

Under 13 Del. C. § 1513(b), property acquired by gift, bequest, devise, or descent (inheritance) is an excluded category of separate property. A direct inheritance — money left to you in a will, assets transferred through an estate — is generally separate property if it remains separate and traceable.

The same applies to gifts from third parties given specifically to one spouse.

When Inheritance Loses Protection

The separate status of an inheritance is fragile. Commingling can destroy or complicate tracing — mixing inherited funds with marital property can make the original source difficult to follow.

Depositing into a joint account. If you receive a $100,000 inheritance and deposit it into a joint checking account that both spouses use for household expenses, the inherited funds blend with marital deposits and withdrawals. That can complicate tracing and lead the court to classify some or all of the asset as marital.

Using inherited funds for joint purposes. If you use inherited money to renovate the marital home, pay down the joint mortgage, or fund a family vacation, that use can lead the court to classify some or all of the asset as marital.

Retitling. Adding your spouse's name to an inherited asset — a brokerage account, a piece of real estate — can lead the court to classify some or all of the asset as marital.

How to Protect It

The burden of proof falls on the person claiming the asset is separate. To protect an inheritance:

• Keep it in a separate individual account. Never deposit inherited funds into a joint account.
• Don't use it for marital expenses. If you want to use inherited money for joint purposes, understand that the use can lead the court to classify some or all of it as marital.
• Maintain documentation. Keep the original estate documents (probate records, letters of administration, distribution checks) that establish the source of the funds.
• Track the paper trail. If you reinvest inherited funds, maintain records showing each step — from the estate distribution to the current account — so the source can be traced.

The Tracing Requirement

To exclude an inherited asset from the marital estate, you must "trace" it — present an unbroken chain of documentary evidence proving the current asset was acquired solely with non-marital funds. Bank statements, investment transfer records, and settlement sheets form this chain.

If the chain is broken — funds moved through a joint account, mixed with paychecks, or used for joint purchases — tracing can become difficult or fail, and the court can classify some or all of the asset as marital.

Appreciation on Inherited Assets

Passive appreciation on separate property generally remains separate. If you inherited stock worth $50,000 and it grew to $75,000 through market appreciation alone, the $25,000 gain is typically separate.

However, if the appreciation resulted from active marital effort — you spent time managing an inherited rental property, or marital funds were invested in improving an inherited business — the active appreciation may be classified as marital property.

The Delaware Divorce Financial Split Guide includes an Asset Classification Worksheet to help you trace inherited and premarital assets and determine whether they've maintained their separate status.

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