Understanding where you stand with inheritance in divorce can be challenging to get your head around, especially when you’re going through an emotionally difficult time. Nevertheless, addressing the legal aspects of inheritance and divorce is critical to ensure that your financial interests are protected and to prevent unwanted outcomes.
Luckily, our dedicated team at Newtons Solicitors has gained years of experience in matters surrounding financial settlements after divorce and is here to discuss if your ex-spouse is entitled to your inheritance.
What is inheritance?
The term ‘inheritance’ refers to the assets that an individual leaves to others once they have passed away. Inheritance can involve many different types of assets, including money, investments like stocks, property, antiques, vehicles, and jewellery, amongst other things. These assets are typically passed down to the beneficiaries through a legal will document from the deceased’s estate.
You might receive your inheritance from someone before you get married, or during the marriage. Either way, it is common for inherited financial assets to get mixed up or mingled with marital assets, which is why an ex-partner might claim rights to some or all of the recipient’s inheritance.
Receipt of Inheritance
If the recipient received the inheritance before the marriage and has kept this wholly separate and external to the marriage, there would be a strong argument for the recipient to keep it and for the inheritance to be “ring-fenced”, provided that there are sufficient matrimonial assets to satisfy both parties reasonable needs.
If you or your spouse/civil partner are in receipt of inheritance during the marriage or if it was used to purchase a marital asset/property, it is something that will no longer be “ring-fenced” and the significant contribution could be taken into account in financial settlement.
The financial disclosure stage will provide information detailing the receipt of inheritance. How the Court takes it into account will depend upon the nature and value of the property; how and when it was acquired, and the parties’ needs. When calculating the capital of the marriage, such “pooled” inheritance will be included.
In both cases, it must be remembered that if the needs of the non-inheritance receiving party cannot be met without incorporating the inheritance, the fact that it is inherited will carry limited weight.
Usually, future inheritances are not considered due to the uncertain nature of such potential benefits. However, they may be if it is expected that the person making the bequest will die in the near future and the inheritance is likely to be substantial.
The final financial order, whether it be a Consent Order made by agreement or following a contested hearing, usually provides that there is to be a clean break (although this does depend on circumstances), which means you or your spouse/civil partner would be unable to make any claims against any inheritance that either of you receives in the future following the making of the Order.
What is and isn’t considered a marital asset?
When it comes to understanding if you have to share inheritance in a divorce, you need to distinguish between matrimonial and non-matrimonial assets.
- Matrimonial assets
Marital assets typically come into the possession of either partner after the marriage has become legally binding, thus making it marital property. Examples of these financial assets include pensions, properties, and savings.
- Non-matrimonial assets
Non-matrimonial assets are those of which are obtained by you or your ex-partner before you got married or after you got divorced. Because you did not acquire these financial assets during the marriage, they cannot automatically be claimed by your ex-partner. They will usually be excluded from your financial settlement in your divorce. Despite this, if the marital assets cannot satisfy your and your ex-partner’s living needs, the Court will consider non-matrimonial assets in the agreement.
What about inherited property and divorce?
Property and divorce can cause significant conflict, particularly if the ex-couple’s property formed part of one party’s inheritance.
As you may already be aware, everything you inherit is considered your own before you get married to someone. Despite this, sealing the deal with marriage transforms most of your personal assets into joint marital assets. Whether your property will be split or not could depend on the following:
- How long you and your ex-partner were married
- When you received the inherited property
- If you utilised the inheritance to benefit your marriage and family
- The financial needs of you and your ex-partner
Where possible, Courts try to ensure that both parties and their children can maintain the living standards they had when they were married. As a result, your inherited property will most likely be considered a marital asset, especially if you and your ex-partner lived there during the marriage.
If the property was inherited before marriage and was completely separate to the marriage, it could be “ring-fenced” from the matrimonial pot. However, this would only be the case if there were enough matrimonial assets to ensure the needs of both parties and their children were met.
Why are Clean Break Orders important?
Resolving any financial settlements with a Clean Break Order is integral because it ensures that your ex-partner cannot claim against you if you inherit an asset later on. This type of Order will cut any financial ties you and your ex once had, allowing you both to move forwards as financially independent individuals.
How can Newtons Solicitors help?
Divorce and family law can be challenging to handle at any stage of your life, so we would advise that you lean on the expert guidance of a solicitor to secure the best possible outcome, particularly in regards to resolving financial matters in divorce.
A solicitor can advise you whether an inheritance is likely to be considered. We offer a first-class approach to what can be a difficult and upsetting time. Please note we also offer a free half an hour confidential appointment and can be flexible when needed. So, if you wish to discuss this or any other family law issues, please contact the Family Team at Newtons Solicitors today.