Equitable distribution is the legal term for dividing marital property upon divorce. The term refers to any increase in value of property that occurs during the marriage. Often, most of the property that a married couple owns is marital, but not always. The source and time of purchase of a piece of determines whether it is property or not. The hard work of the parties is the most common source of property.
The benefits of hard work are split between the parties on the assumption that each party helped the other. But other property is not. Inheritances are the most common example. Gifts are also not property. Disability payments are usually not included in marital property.
Note that this rule does not apply if the parties mix the inheritance into communal funds. The issue that comes up in divorces is how much mixing is necessary. If the funds can be clearly traced or have survived in an account in the name of one party alone, those funds will not be marital property. If the parties to the divorce mixed separate funds together, for instance, to come up with a down payment for a house, then the funds are marital property.
In an important case for Pennsylvania on this issue, the Superior Court stated:
Pennsylvania, not being a community property state, retains the separate property concepts derived from common law. We, in addition, have rejected …theories which permit no change in the character of property separately acquired, regardless of contribution by the other party (inception of title — source of funds) or transforms ownership of separate property into community property if there is the slightest commingling of property (transmutation). Anthony v. Anthony, 355 Pa.Super. 589, 514 A.2d 91 (1986). (Quoted in Winters v. Winters, 355 Pa. Super. 64; 512 A.2d 1211.)
Plenty of room for arguing exists here.