Inheritance and divorce

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When people separate or divorce, they often mention that their ex has wealthy relatives from whom they can expect to inherit. It’s commonly assumed this should be brought into the mix and available for division just like any other asset on divorce. There’s even more of an issue when one party has already inherited assets during the marriage and wants to disentangle them from matrimonial funds.

Divorce and anticipated inheritance

As the law currently stands, there’s no requirement on a parent to leave anything under their will to their children. There is therefore no certainty that your spouse will benefit from their parents when they die. Indeed, if their children are currently going through a divorce, it’s not uncommon for parents to decide to review their Wills and benefit their grandchildren instead. It also has to be born in mind that if the parents concerned are still reasonably young there’s no knowing what will happen between now and their eventual death – significant percentages of their estates could be used up on care home fees for example.

So unless your spouse is an only child, there are no grandchildren and their sole surviving parent is elderly and infirm an argument that they are definitely going to benefit from their parents’ estate is unlikely to succeed and if it did it’s likely that a potential inheritance would be seen as a resource available to them rather than an asset available for division between you.

Divorce where an inheritance has already been received

So what happens to an inheritance already received? Can it be separated from marital finances and ring fenced so that it’s not available for distribution? Certainly there are arguments for treating marital acquest ( ie what you have built up by your joint efforts and enterprise) differently to non-marital acquest and if you can establish that an asset is non-marital then the starting point is that it shouldn’t be divided.

Establishing that something is non-marital will depend very much on when you got it and how it has been treated. So if one of you inherited some money at the start of a long marriage, invested it in a jointly owned property that you owned equally and continued that position as properties were subsequently bought and sold it’s clear that the funds, whatever their original source, have been subsumed into marital finances and treated as joint and you’re not going to be able to disentangle them many years down the line. If however, the monies have always been treated as entirely separate – perhaps held, untouched, in a savings account in the recipient’s sole name, and particularly if they were received either very late in the marriage or even post separation then there’s clearly a much stronger argument for saying they should be ring-fenced and not available for distribution between you.

Unfortunately, even if you can establish that inherited funds have never been treated as a joint resource that doesn’t guarantee they will be taken out of the equation entirely. When looking at the resolution of financial issues following divorce the needs of the parties and their children has to be considered and meeting reasonable needs is the overriding consideration. So, even if it’s clear that a particular asset can and should be ring-fenced that’s only likely to happen if it’s clear that all reasonable needs can be met without bringing that asset into the equation.

Legal advice on divorce and inheritance

At Slee Blackwell our specialist family team has years of experience when it comes to the resolution of family finance issues. We’ll give you straight talking cost effective advice right from the outset as to how your finances are likely to be treated and the most likely outcome of any issue in relation to finances if your marriage has sadly broken down.

Call us on 0808 139 1606 or send us an email.