Divorcing? How the Court treats what you’ve inherited

Divorce has wide-reaching financial implications, including when it comes to inheritance. A lot of confusion exists over what the consequences are for property or assets you have inherited during your marriage.

In England and Wales, property and assets acquired through work, business or investment are usually put into the ‘matrimonial pot’ and divided equally on divorce. As a general rule, the Court’s view is that there is a difference between assets and property which have been amassed by the parties during the marriage by virtue of their own endeavors, and assets which have been inherited.

What happens if I have inherited assets during the marriage?

Money or property you have inherited are not automatically excluded from the assets to be divided. There are a number of factors that the Court will take into consideration, such as the size of inheritance, when you received the inheritance, length of marriage, how it was dealt with during marriage and the financial needs of the parties.

What happens if the inheritance has been used during the marriage?

Intermingling of inherited assets within the matrimonial assets could give rise to a claim that the inheritance should be treated as part of the matrimonial pot and capable of sharing on divorce. This also applies if the inherited assets are transferred to joint names or used for the benefit of the family.

What if the exclusion of the inherited assets puts one party in a much stronger financial position?

Inheritance can be treated as a matrimonial asset if both parties’ “needs” require the same to meet capital or income needs. Upon divorce, the extent of a party’s needs can vary hugely, and will depend on many factors including the length of marriage, standard of living enjoyed in the marriage and most importantly, the arrangements which have been made concerning the parties’ children. Furthermore, a Court can be persuaded to award more matrimonial assets to one party on the basis that the other party has access to inheritance as an alternative resource to make sure they can live.

What options are there to protect my inherited assets?

The ring-fencing of inherited assets away from the matrimonial pot is more likely if the inherited assets have been kept separate and are not required to meet the parties’ needs on divorce. Upon divorce, a financial settlement will protect you from any future claims your ex-spouse may make if you inherit property or assets at a later date.

If you or your spouse have recently inherited and you are considering a separation, taking advice on your legal options is essential.

Blaser Mills’ Family & Divorce team are highly experienced solicitors who can advise you on your respective rights and obligations. Should you require further information on this matter, or any other advice concerning family or divorce matters, we will be happy to discuss your options with you over the telephone at no charge.

If you would like to speak in confidence to Jolene, please call 01494 478603, or email her at jfh@blasermills.co.uk