Suppose Wanda Built receives an inheritance during the marriage from her late father Cornelius.

If Wanda puts the money into the bank and doesn't touch it, is that money her property, or is her husband Porly entitled to a share?

Now suppose Wanda uses the money to buy a house which is titled in her and Porly's names. Then what?

The states' responses to these thorny issues vary widely.

Most states will, in the first case, allow Wanda to keep the entire inheritance.

But in the second case, many states will declare that there was a gift to the marriage of the funds, and so the house will be marital property.

Other states will assign as separate property the value of Wanda's investment.

If the house has gone up in value, those states split on whether the separate property portion is just the original investment, or whether the appreciation is separate property as well.

Similarly, in the case of cash deposited in a bank or investment account, the states split on whether the earnings are separate or marital property.

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