Inheritance on divorce can be a very thorny topic and it can become an emotional one. By its nature inheritance is derived from the family of one party and that person can feel that it is unfair that there be any element of sharing of it. It is also quite common for other family members to have views on the topic.
Timing is important
If an inheritance has not yet been received and it is not imminent the court will often largely ignore it on the basis that there is no certainty as to whether it will be received and, even if it is, when it may be received and how much?
The court’s primary focus is on meeting needs and, if it can be avoided, it would not want to leave one party in a position where their needs would only be met if an inheritance were to be received in the future.
If it has been received, then it will be relevant when it was received. If it was received just prior to or after separation, then an argument to exclude this from any settlement will be much stronger than if it was received many years ago and during the marriage. Similarly, if it were received before the marriage and, particularly if the marriage was short, this might be a good argument for the court to exclude it from any settlement. In the latter situation the court will look at how the inheritance was used (or not) during the course of the marriage.
Does it matter what you do with it?
The short answer is yes.
If the money has been mingled with family assets, then it will be more difficult to argue that it should be excluded, particularly if it has been used towards the mortgage or renovations on the family home, for example.
If, conversely, it has been kept in a separate account or as a separate asset then the argument will be stronger.
So, will it be taken into account?
There is no black and white answer it will very much depend on the circumstances of the case. Even in circumstances where there are good reasons why the inheritance should not be shared the court may decide that one party’s “needs” mean that the inheritance cannot fairly be excluded from any settlement in its totality.
There are a number of factors involved and therefore it is important to take advice so a proportionate and sensible approach can be taken.
How can you protect it?
One of the main drivers behind pre-nuptial agreements is to protect inheritance/ family wealth and these can be a very useful tool. If the parties are already married, they can enter into a post-nuptial agreement- this is effectively the same type of document as a pre-nuptial agreement but signed after the wedding.
These agreements can set down principles including that any inheritances should be excluded from any settlement or only taken into account in certain circumstances or up to a certain amount.
If you want more information about inheritance on divorce, pre-nuptial agreements or any other family law issues please do not hesitate to contact a member of our specialist divorce and finance team.
