Family law
What happens with inheritance during a divorce?
Divorce is already a challenging time, but what happens when inheritance is included? Our family law experts explain your rights and what needs to be considered.
During a divorce there are many elements of uncertainty, which is completely understandable. It is an emotional time and with so many decisions to make, it can be unclear about the division of assets and who is entitled to what. When including any inheritance, that can further complicate matters.
In UK divorce law, inheritance holds a unique position that can significantly impact financial settlements during divorce proceedings. The treatment of inherited assets depends on several key factors:
- The length of the marriage.
- The needs of any children.
- The financial situation of both parties.
- How the inherited assets were used during the marriage.
- Timing of the inheritance (before or during the marriage).
Inheritance in divorce court
UK courts follow a structured process guided by the Matrimonial Causes Act 1973 and subsequent case law, when dealing with inheritance in divorce cases. The main steps in this process include:
- Financial disclosure: Both parties must provide a full disclosure of assets, including any inherited assets.
- Consideration of Section 25 factors: The court evaluates the case based on criteria set out in Section 25 of the Matrimonial Causes Act.
- Application of the sharing principle: The court starts with the presumption of equal division, then considers reasons to depart from this.
- Needs analysis: The court will assess whether the proposed division meets the future needs of both parties and any children.
- Fairness test: The judge ensures the overall settlement is fair, considering all circumstances of the case.
- Final order: The court issues a financial order, which may or may not include inherited assets in the division.
Protecting future inheritance
Regarding inheritance in a divorce, the court has discretion as to how it is treated and/or divided. However, there are steps you can take to help protect any inherited assets.
Keep inherited assets separate: Maintain inherited money in a separate bank account and avoid using it for couple/family expenses.
Clear records: Keep clear records of the inheritance, including the source, date received, and how it has been used.
Pre- and post-nuptial agreements: Draft a legal agreement with your spouse regarding how inheritance will be treated in the event of divorce.
Avoid joint ventures: If you invest inherited funds, do so in your sole name rather than jointly with your spouse.
Be transparent: Disclose all inherited assets fully during proceedings to maintain credibility with the court.
Seek early legal advice: Consult a family law specialist as soon as you anticipate divorce proceedings.
If you receive an inheritance after being separated but before your divorce is finalised, it’s crucial to inform your legal representative immediately as this may impact the financial settlement.
Family law specialists
Understanding the position of inheritance during a divorce can be complicated, which is why it is important to consult experts. Our team of leading experts in family law can offer bespoke advice from day one to ensure you are constantly supported during this turbulent time.
Contact us online today or call us on 0330 041 5869 .
