When a marriage ends, dividing finances can be complex, especially when inheritances are involved. Many people assume that inheritance automatically stays with the person who received it. However, this is not always the case.
The Starting Point
In divorce, the court’s first consideration is the needs of both parties and any children. Whilst inheritance is often treated as separate from matrimonial assets, this depends on how it has been treated during the marriage and whether the parties’ needs can be met without using it.
Ringfencing Inheritance
If an inheritance has been kept separate, for example, in a personal savings account or property held solely in the recipient’s name, it may be easier to argue it should be excluded from the matrimonial pot so long as it is not needed to meet one spouse’s needs. However, if the asset has been mingled with marital property (such as using an inheritance to buy a family home, paying off mortgages, or using it for family expenses), it can become harder to claim it as “non-matrimonial”.
Needs Trump Everything
Even if an asset is considered non-matrimonial, the court can still order that it be taken into consideration if that is necessary to meet the housing and income needs of both spouses and any children. For example, if one spouse has received a substantial inheritance and the other assets are limited, the court may consider it fair that the parties use some of the inherited assets to meet their needs.
How to Protect Inheritance on Divorce
- Prenuptial or Postnuptial Agreements: These agreements can set out how inheritance should be treated on divorce. Whilst such agreements are not legally binding, they can be upheld by the court if entered into correctly.
- Keeping Assets Separate: Avoid mixing inherited assets with joint funds where possible.
- Clear Evidence: Keep documentation showing the source of the inheritance and how it was used. This can help prove that the inheritance should be considered non-matrimonial.
In Summary
The court generally will not invade inherited property unless there are insufficient assets to meet the parties’ needs. It is important to remember that a court has a wide discretion when it comes to considering how inheritance should be treated on divorce, and each case will be determined depending on its facts.
How Nelsons can help
If you are facing delays or need advice about inheritance on divorce, our expert family law team is here to help. Contact us today for expert support and tailored guidance.
Julia Kolomiiets is an Associate in our expert Family Law team, which is ranked in Tier One in the independently researched publication, The Legal 500. Julia specialises in private family law, advising on separation and divorce, including financial settlements and arrangements for children, and domestic abuse.
If you would like some advice on the steps you can take, then please contact our team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form. We will be happy to discuss your circumstances in more detail and give you more information about the services that we can provide.
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