How does the Court deal with inheritance upon divorce?

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As a family solicitor one of the most common questions I am asked is “what will happen if I inherit whilst going through a divorce”. In addition to this question, there is also the concern as to what will happen to any inheritance that is likely to be received within the marriage in the future, where one party is contemplating a separation or divorce but has not yet taken the difficult step to move forward with this.

Strictly speaking it depends upon when any inheritance is received by a party as to how it will be considered. If a party inherits during the marriage when the parties were very much together then often this inheritance, if substantial, is utilised by the parties to purchase property, pay off an existing mortgage or carry out renovations to their home. It may also be paid into a joint account or used to support the parties’ lifestyle, or pay for an expensive family holiday. The point is that the funds will have been mingled into the family assets/funds and will have been used for the benefit of the family and/or the parties themselves. Depending upon the circumstances in any given case it would usually be unfair to then repay/realise these funds from the family pot before the rest is divided between the parties or, in essence, pay back the party that was the beneficiary. If the marriage in question was very short (2-3 years) then there would be a good argument for allowing the inheritance to be ringfenced for one party only. This is because it is easier to separate the assets from what was owned or bought to the marriage by each party and there is often less reliance upon the inheritance by one party given the length of the marriage. However, in most cases the length of the marriage usually dictates that the inheritance is no longer one party’s sole resource and is therefore treated as a marital asset to be divided between the parties subject to the respective needs.

Where an inheritance is received by one party going through the process of divorce then the Court would consider this a non-matrimonial asset, and this would therefore not be included in the marital pot. However, the inheritance could be seen as a resource available to one party to use where for example there was inadequate capital to rehouse both parties from the marital resources available to them. If both parties have met their needs which in the main is to ensure they and any children are rehoused in adequate accommodation and can afford their day-to-day costs, then it is unlikely any inheritance will be considered for division between the parties.

Importantly once you have resolved the financial issues resulting from your divorce and recorded your agreement in a legally binding document called a Consent Order neither party is able to make any future claims against you or your own estate. Moving forward your assets are therefore protected.

If you have any further queries regarding the points above, or would like to discuss your own situation then please do not hesitate to contact me at kate.ryan@ibblaw.co.uk.