Inheritance and divorce
7 May 2021 by Julia Brewer
One common question asked to any family lawyer is whether inheritance received by one party either before, during the marriage, or post-separation is taken into account by a Court when considering the separation of finances.
How does the Court decide what is a fair division?
When dealing with divorcing couples’ finances, the Court has a wide discretion as to orders that can be made to achieve a fair division.
The Court must take account of the following factors:
- The income, earning capacity, and other financial resources of each party, including any financial resources likely to be available in the foreseeable future;
- The needs and obligations of the parties;
- Standard of living enjoyed by the family before the breakdown of the marriage.
- Age of each party and the length of the marriage
- Any disability of either party
- Contributions made to the welfare of the family, including by looking after the home or caring for the family.
- Conduct (if it is inequitable to disregard it and only in the most serious of cases).
- Loss of any benefit by way of divorce.
What is the process?
The Court’s first consideration will be to the welfare of the children whilst under the age of 18. The Court also has to consider if it is possible for there to be a financial clean break.
The Court’s starting point is to consider whether an equal division of “matrimonial assets” is sufficient to meet each party’s needs, giving first consideration to meeting the needs of the children.
Inheritance received by one party which has not been mingled into the family finances is likely to be considered a non-matrimonial asset and not initially considered by the Court. However, if such inheritance was mingled with matrimonial assets, for example, put in a bank account with other savings that were accrued during the course of the marriage or used to buy or renovate the family home, then then this inheritance is more likely to be treated as having become a matrimonial asset.
Other assets that may be considered as “non-matrimonial” include assets obtained before marriage (or cohabitation prior to marriage) or post-separation. However, if it is a long relationship, the Court is less likely to consider such assets as non-matrimonial.
If an equal division of matrimonial assets is insufficient to meet the parties’ respective needs, then the Court will consider how much of the non-matrimonial assets are required to meet the parties’ respective needs.
The Court always has an obligation to ensure that the division is a fair outcome having regard to the factors listed above.
This is a complex area and the above is only a general indication of the position. You should always seek detailed legal advice on the facts of your case. Our Family Law team has many years of experience advising in cases concerning issues of matrimonial finances. Please contact our Family Law team at 01206 700113 or email at [email protected].
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