If a spouse inherits real property (real estate) or personal property (money, stocks, bonds, art, jewelry, antiques, etc.) before or during marriage, it is generally separate property (not marital property) and is not subject to division upon divorce in equitable distribution/common law property states or in community property states. But any appreciation or increase in the value of such separate property (e.g., real estate, stocks) and any income from such separate property (rental payments, stock dividends) may be marital or community property—unless the parties agree otherwise in a written prenuptial or postnuptial agreement.

An important exception to this general rule is the situation in which separate property from an inheritance is commingled with marital or community property—by placing funds from both sources in the same bank account, for example, or holding (titling) real estate from both sources in the same entity (limited liability company, family limited partnership, etc.).

In North Dakota, which follows equitable distribution principles rather than community property laws, property inherited by one spouse either before or during the marriage is typically considered separate property. This means that upon divorce, inherited real estate or personal property such as money, stocks, or valuables are not subject to division between the spouses. However, any increase in value of the inherited property, as well as any income generated from it (like rental income or stock dividends), may be considered marital property and thus subject to division, unless there is a prenuptial or postnuptial agreement stating otherwise. It's crucial to note that if inherited property is commingled with marital property, for instance by depositing inherited funds into a joint bank account or titling inherited real estate jointly, it may lose its separate property status and become marital property, making it subject to division upon divorce.