What happens to inheritance during a divorce?

Divorce is complicated, and there is no blanket approach to splitting up the assets, with each case depending on several factors. This becomes more complex when it comes to inheritance, as there can be much confusion over property and assets inherited either before or during the marriage.

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Generally, in England and Wales, all the marriage assets, unless stated otherwise in a prenup, will be pooled and treated as joint marital assets. However, money or property that you have inherited either prior or during the marriage can be considered as non-matrimonial assets. Therefore, they will not automatically be included or excluded from the assets that need to be divided. 

When it comes to divorce, every case is different, and the individual circumstances will play a vital role in the division of both the non-matrimonial assets. These include the size of the inheritance when you have received it, how it was dealt with during the marriage and both parties’ financial needs post-divorce. If the financial requirements are that one or both parties and any dependants need the inherited assets, they may need to go into the pot.

Although each case is different, and it is essential that when it comes to dividing up your assets, we suggest that you speak to one of our legal professionals at Qredible.co.uk for advice on your circumstances as soon as possible can make an informed decision on how to best proceed.

How are assets divided during divorce?

When splitting marital assets, the Court will usually split them in half; however, the family court will consider all the factors set out in Section 25 of the Matrimonial Causes Act. 

The first of these is that the welfare of any children under the age of eighteen is looked after and that they can ideally live in an owned property rather than rented. 

After this, they will consider each spouse’s income, the resources that each party brought to the marriage, the duration of the marriage, the financial needs of each party, and the ages of the parties. 

These factors can vary significantly, meaning that there is no blanket approach to dividing assets, which becomes more complex when you factor in inheritance.

What happens to inheritance during a divorce?

When looking at inheritance, there is no specific reference to this in the law, so it is common for one party to ask if they can protect any inheritance that they may have bought into the marriage or received while in the marriage.

If you have an inheritance that was received before or during the marriage, it is possible to argue that the Court should keep it out of the marriage pot. This is called ‘ring-fencing an asset. In English and Welsh law, it can be argued that you should not treat inheritance in the same way that other property or assets that have been brought into the marriage or acquired during and that the spouse that did not inherit the assets will have a weaker claim to it.

If you wish to ring-fence any inheritance, then the context surrounding the inheritance is essential. That is its value, how it was provided and the nature surrounding it is critical; for example, if it is a property that has been passed down through one of the families for generations, the Court will take this into account. There is a possibility to argue that the other party may inherit properties or assets in the future; however, this does not usually make much weight in the negotiations as there is a lot of uncertainty in hypotheticals.

However, certain factors will play a role in the Court’s decision to ring-fence the inheritance and where, even if it is not split equally, it may still have to be divided. Although it is important to note that each case will be different, however, it is more likely that inheritance may be shared for longer marriages as finances and circumstances become entangled after more extended periods together.

The other factor that will sway a court to reject the ring-fencing of the inheritance is both parties’ needs. This means that the Court will consider splitting the inheritance if the other party’s financial needs and any children cannot be met without including it in the Divorce Financial Settlement. The Court will always have to ensure that all factors are considered to ensure that their judgment is fair when dividing any inheritance.

How can I protect my inheritance?

While there are cases where the non-matrimonial inheritance can be excluded from the marital assets, it is not always the case, with many factors being included in the final decision of the split. As each of these factors can vary significantly, it does mean that there is no consistent approach when it comes to dividing an inheritance. This means that there is no guaranteed way to protect your heritage unless you decide to keep it secure with a properly drafted pre-nuptial or post-nuptial agreement. 

It may also be a good idea that if you do receive an inheritance, avoid mixing it with the other matrimonial assets. Try keeping it distinctly separate may help you argue a case to get it ring-fenced in the divorce settlement.

Key Takeaway

Dealing with non-matrimonial assets inherited is always much more complex, and it requires specialist advice tailored to individual circumstances. Here at Qredible.co.uk, our divorce solicitors explain the legal and practical realities and argue your case in the negotiations. We have both the experience and the knowledge to advise and support you through the divorce proceedings.

 

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