Inheritance is not marital property

Law Reporter, May 2001

Inheritance is not marital property.

Sampson v. Sampson, 14 P.3d 272 (Alaska 2000).

The Alaska Supreme Court held that a spouse's inheritance is not marital property

Here, a man inherited property from his mother. He and his wife viewed the inheritance as a resource for their future and the wife cashed in her retirement account, in part because she knew that the inheritance would be available for their future needs. The couple divorced a few years later and the trial court ruled that the inherited property was a marital asset.

The husband appealed the decision, arguing the trial court erred in finding that he intended to make the inheritance marital property.

Reversing, the state high court noted there is a strong presumption that inherited property is separate property not to be included in the disposition of property during a divorce. However, the court explained, inherited property may be conveyed to the marital estate when that is the intent of the owner and conduct demonstrates that intent. Further, separate property may be invaded when the balancing of equities requires it.

The court cited case law holding that a husband's testimony that he assumed that all property received during the marriage should be shared was not sufficient to overcome the strong presumption that an inheritance is separate property. Here, the court said, the husband's belief and his representation to the wife that the assets were available to them during the marriage does not warrant a finding that the assets were converted to marital property. Instead, his statement that the inheritance would be available to them must be understood as referring to the period during which the parties remained married.

Moreover, the court said, the wife's reliance on the husband's inheritance does not prove that the husband intended to transmute the inheritance. The husband told the wife she could cash in her retirement account if she wanted, but made no promise regarding the inheritance and took no action demonstrating an intent to convert his inheritance into marital property. His general statements that he viewed the money as a hedge for the couple in the future while they were married were not evidence of an intent to transmute, the court found.

Accordingly, the court remanded the case for the trial court to determine whether the balancing of equities requires invasion of the inheritance.

Husband's Counsel

Peter F. Mysing, Kenai, Alaska