Is an Inheritance Considered Marital Property in a West Virginia Divorce?

Filing for a divorce is never an easy decision to make, even if it is the only recourse left under the circumstances. If you or your spouse received an inheritance during the course of the marriage, it adds another complex layer to the division of marital assets in a divorce.

Most couples don’t think about securing their inheritance assets as separate property during marriage until they find themselves in a situation where the marriage is about to end. Divorce-related property division can be difficult and confusing. An experienced divorce attorney in West Virginia can help you understand your rights and provide you with strong legal representation.

Inheritance is Considered Separate Property in WV

Inheritance money and property is usually considered separate in a divorce. In WV, all assets are divided into separate and marital property. Separate property refers to those assets that remain with the spouse owning it. By contrast, marital property is divided between the spouses. Generally, separate property is any property that is received by you or your spouse before the marriage.

Marital property refers to those assets that are obtained during the marriage. But inheritance is an exception. Inherited property is considered separate even when the inherited property is received when you were married. It’s important to understand that even though inheritances start as separate property, they don’t always remain separate.

Inheritance Can Convert to Marital Property

There are certain exceptions when inherited property gets converted to marital property. After inheriting separate property, it can get mixed with marital property. This is also known as commingling. Many spouses unintentionally commingle their inheritance and other assets during the course of the marriage.

For instance, if you inherit money from the will of a family member after they pass away, it will be considered separate property. But if you place it in a joint account where your spouse also keeps their money, it will be regarded as marital property.

Changing the nature of the separate property through transmutation is another possibility. For instance, you may inherit a house or some other property, and add your spouse’s name to the title. In this scenario, the house will be considered marital property.

Any type of inheritance can become commingled, such as jewelry, personal property, and guns among others. Inherited property can easily have a marital component to it under specific circumstances.

For instance, if you put your spouse’s name on the property, it becomes marital property. There are several other issues attached to property division during a divorce. You should speak with a skilled divorce attorney in WV to protect your legal rights.

Impact of Inheritance on a Divorce

Any inheritance you acquire once the divorce is finalized remains with you. It is considered separate property since there is no longer a legal marriage. If during the course of the divorce, your inheritance is deemed to be separate, it will remain with you. This is regardless of the manner in which any remaining property is divided.

If the inheritance is determined to be marital property, it will be distributed fairly and equitably. This means the inheritance will be divided in the same manner as the remainder of your marital estate.

Division of marital property is not always clear-cut. This is why you should have a knowledgeable divorce attorney look out for your best interests.

Determining Spousal Support if There is an Inheritance

Spousal support is a payment made by one spouse to the other for helping them maintain a similar lifestyle as the one they had during the marriage. A spousal support award in West Virginia doesn’t necessarily impact the marital property received by a spouse. However, separate property owned by the spouse may affect the alimony award.

This is because spousal support is based on individual assets and income. If the paying spouse doesn’t earn enough to make fair spousal support payments, the court can order the spouse to use their separate property to make a lump sum payment, for example. By the same token, the court may reduce the alimony payment if the recipient spouse has a large inheritance.

What is West Virginia’s Inheritance Tax? 

When it comes to the question of inheritance tax, West Virginia stands out among many states by not imposing one. This can be a significant point of interest for individuals planning their estates or those who are anticipating an inheritance in the state. However, the absence of a state-level inheritance tax doesn’t mean that inheriting property in West Virginia is entirely tax-free. There are other considerations, particularly the federal estate tax, and general tax filings associated with a deceased person’s financial affairs.

What is an Inheritance Tax?

Before diving into West Virginia’s specifics, it’s helpful to understand what an inheritance tax is. An inheritance tax is a tax levied on the assets received by an individual beneficiary from the estate of a deceased person. Unlike an estate tax, which is paid by the deceased person’s estate before assets are distributed, an inheritance tax is typically paid by the person who inherits the assets. The tax rate and exemptions can vary widely from state to state, and often depend on the relationship between the beneficiary and the deceased. For instance, spouses or close family members might be exempt or pay a lower rate, while distant relatives or unrelated beneficiaries might face higher taxes.

West Virginia’s Stance on Inheritance Tax

The good news for beneficiaries in the Mountain State is that West Virginia does not have a state-level inheritance tax. This means that if you inherit money, property, or other assets from someone who lived in West Virginia, the state itself will not impose a tax directly on your inheritance. This policy aims to simplify the inheritance process for West Virginia residents and can be beneficial for those looking to maximize the value of their bequests to their heirs.

West Virginia’s Stance on Estate Tax

In addition to not having an inheritance tax, West Virginia also does not impose a state-level estate tax. An estate tax, often called a “death tax,” is a tax on the right to transfer property at death. It is calculated based on the total value of the deceased person’s estate before it is distributed to heirs. The absence of both an inheritance tax and an estate tax at the state level makes West Virginia a more favorable state from a death tax perspective compared to states that do levy these taxes.

The Federal Estate Tax: A Key Consideration

While West Virginia doesn’t have its own inheritance or estate tax, residents must still be aware of the federal estate tax. This is a tax imposed by the U.S. government on large estates. The federal estate tax is only applicable to estates exceeding a certain value, which is a very high threshold. For example, following the signing of the One Big Beautiful Bill Act on July 4, 2025, the federal estate tax exemption amount is $15 million per individual for 2025 and later years, with annual adjustments for inflation starting in 2026. This means that an estate’s value must exceed this amount before any federal estate tax is owed.

If an estate’s value is above the federal exemption limit, then the portion exceeding that limit will be subject to federal estate tax rates, which can range from 18% to 40%. It’s important to note that this tax is paid by the estate itself, not by the individual beneficiaries. Therefore, even though West Virginia doesn’t tax inheritances, a very large estate in West Virginia could still be subject to a substantial federal estate tax.

Other Important Tax Filings and Considerations

Even without state inheritance or estate taxes, there are other tax-related responsibilities that arise after someone’s death:

• Final Individual Federal and State Income Tax Returns: These are due by Tax Day of the year following the individual’s death. This covers any income earned by the deceased person up to the date of their death.
• Federal Estate/Trust Income Tax Return (Form 1041): If the estate generates income during the probate process (e.g., from investments, rental property), this return is due by April 15 of the year following the individual’s death.
• Estate Income Taxes: While West Virginia doesn’t have an estate tax on the value of the estate itself, any income generated by the estate or trust during its administration may be subject to West Virginia personal income tax rates.
• Out-of-State Property: If a West Virginia resident inherits property located in another state, that other state’s inheritance or estate tax laws might apply, depending on that state’s specific regulations.
• Property Tax: This is a separate tax levied on real estate and tangible personal property by county and local authorities in West Virginia. This tax continues to apply to inherited property.

Probate in West Virginia

While not a tax, the probate process is an important part of handling an inheritance. Probate is the legal process of validating a will (if one exists), inventorying assets, paying debts and taxes, and distributing the remaining property to heirs or beneficiaries. In West Virginia, the County Clerk and County Commission oversee the probate process. West Virginia offers a simplified probate process for smaller estates, generally those with a value (excluding real estate) of $50,000 or less. Even without state-level death taxes, understanding and navigating the probate process is crucial for rightful inheritance distribution.

Our Knowledgeable Divorce Lawyers are Here to Give You the Best Legal Advice and Support. Call Now.

Divorce is an emotional situation and tensions can run high. Adding inheritance can make the situation even more difficult. The experienced attorneys at the law firm of Pence Law Firm PLLC will look out for your best interests and advise you on the best way to handle your inheritance.

Schedule your free case review with our lawyers today. Call us at (304) 345-7250 or contact us online.