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 Wisconsin, which is a community property state, property inherited by a spouse before or during the marriage is typically considered separate property and is not subject to division upon divorce. However, any increase in value of the separate property, such as appreciation of real estate or dividends from stocks, may be considered marital property. Income generated from separate property, like rental payments, could also be treated as marital property. To ensure that such property remains separate, spouses can enter into written prenuptial or postnuptial agreements. It's important to note that if separate property is commingled with marital property, such as by depositing inheritance money into a joint bank account or titling inherited real estate in both spouses' names, it may lose its separate status and become subject to division upon divorce. An attorney can provide specific guidance on how to maintain the separate nature of inherited property and draft any necessary agreements to protect a spouse's interests.