A common myth when it comes to divorce in the UK is that any assets inherited during a marriage are ring-fenced in divorce proceedings. This belief comes from believing that, as one spouses’ family or loved ones have left it, then it is their inheritance only.
However, inherited assets such as money and property are not overlooked and can be included in the divorce proceedings.
In the UK, inheritances are generally considered to be a non-matrimonial asset. This means that they are not automatically included in the division of assets from a marriage. That said, if the inheritance was mingled with matrimonial assets or used to benefit the marriage (e.g. to buy a family home) it can be considered part of a marital asset.
This means that the family court will look to arrive at a fair financial settlement between the parties.
As the court has discretion to distribute all the couple’s assets in a fair way, this means inherited assets can be included if there is a need.
How can a spouse claim inheritance in a divorce?
As mentioned above, inheritances are not included in the assets to be divided automatically. If the inherited money or property was received by the spouse before the marriage, it will be classed as a non-matrimonial asset.
However, if the inheritance was used to benefit the family, the court can decide to include the inheritance in the financial settlement.
The court can also choose to include the inheritance as well if the overall assets are not enough to meet both parties’ reasonable needs. This means that an inheritance can be shared in a divorce based on how it has been used and what each partner needs to move forward.
It should be noted, however, that inheritances are usually treated as separate.
What other factors can be taken into account?
There are a number of other factors the court will take into account when deciding if the inheritance should change from a non-matrimonial asset to a matrimonial asset. This can include the value of the inheritance, how long the marriage has lasted, and whether you mingled the inheritance with shared money in the past.
An example of this is if you put the inheritance money into a joint account and used it to pay for a family expense. In this instance, the court will deem that you intended for it to be shared and therefore it will become a matrimonial asset between you and your spouse.
What happens to future inheritance after a divorce?
Any inheritance you are expected to receive after a divorce is usually not taken into account. However, if the divorce is finalised without a financial consent order in place, then your ex-spouse may be able to claim against any future inheritance.
It is crucial to ensure that a legally binding financial settlement is put in place before the Final Order is issued to avoid this happening.
How do I protect my inheritance?
As expected, one partner who has received an inheritance may want to protect it to ensure that the money is passed on how they will- e.g. to their children- rather than to their ex.
It is possible to ring-fence inheritance through a pre-nuptial agreement, a post-nuptial agreement, placing the inheritance in a trust for the benefit of the children, or ensuring the inherited assets are kept separate from matrimonial assets by not mingling them with shared money during the marriage.
Each of these four options will need legal advice and planning beforehand. Waiting until a divorce is imminent could limit the options to protect the inherited wealth. Therefore, it is best to get legal advice as soon as the inheritance has been received.
How Davisons Law can help
Inheritance issues during a divorce can be very challenging to navigate, so it is crucial to have expert legal advice to help guide you every step of the way. Get in touch with our Family Law team at Davisons Law on 0808 3036 987, and we will be able to help you with the process.
