An inheritance which has been received during the marriage is in the first instance included in the ‘matrimonial pot’ of assets however, in certain circumstances it may be ringfenced so it will not be available for division between parties upon divorce.
Below we have provided some general guidance on how inheritance is treated in the event of a divorce.
What is inheritance?
Inheritance is a financial asset that is received from an individual who has passed away.
Inheritance can include various types of assets including:-
- Cash
- Investments
- Property
- Personal property such as jewelry, vehicles, and furniture
- Business interests
- Life insurance
When couples get divorced, assets have to be divided between spouses fairly. The initial starting point for the division of assets is on a 50/50 basis although this can be departed from in order to reach a fair financial settlement between parties.
Is my spouse entitled to my inheritance?
All matrimonial assets and liabilities are automatically put into the pot of assets to be divided between spouses however it is important to note in certain circumstances some assets can be taken out of that pot. If the inheritance was received before the marriage or after the marriage had broken down the court will consider how the inheritance was treated before determining how it should be dealt with. For example, with inheritance money that is in a joint account and the whole family was benefitting from this it is possible for the court to decide that the inheritance has become joint property therefore it should be divided between parties.
Is inheritance considered a matrimonial asset?
When couples divorce, all assets are placed into the matrimonial pot for dividing fairly between the parties. In certain circumstances an inheritance will remain in the matrimonial pot of assets.
For instance, if it has been used to:-
- purchase the family marital home
- to pay off mortgage of the marital home
- buy furniture for the family home
- pay off matrimonial debts
- or if it has been placed in a joint bank account.
Then the inheritance may be considered matrimonial property which may be subject to division in a divorce settlement.
If the inheritance has not been mingled with matrimonial assets and kept completely separate from the matrimonial assets, it may be considered as separate property although the Court has the discretion to order for inheritance to be split between the parties if the remainder of the matrimonial assets are not sufficient to meet the reasonable needs of both parties.
What if I received inheritance when we separated?
If you received the inheritance after you and your spouse had separated, it will generally be viewed as separate from the matrimonial assets. However, if the Court still retains that the matrimonial assets provided are not sufficient in meeting the needs of the parties then the Court has the discretion to take the inheritance into account when considering all the circumstances of the case.
How to protect inheritance in a divorce?
We suggest that you keep any inheritance funds separate from your matrimonial assets. For example, you should keep any inheritance in a separate bank account in your sole name and not use it to pay for family expenses.
The treatment of inheritance upon both separation and divorce is a complex issue and therefore it is important to seek legal advice as speaking with a solicitor can guide you if you have concerns regarding inheritance and divorce.
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If you would like further advice on the issues discussed, get in touch to speak with a divorce expert today.