Is a Separated Spouse Entitled to Your Inherited Property

When someone passes away, their survivors will receive their estate through an inheritance. When you receive an inheritance from someone close to you, in most cases it will have been intended to be for you specifically, not for your partner as well. Unfortunately, you may be required to share some of your inheritance with them if you decide to separate or get a divorce. Read on to find out how inherited property is treated in these situations, but first…

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What is an inheritance?

An inheritance refers to the assets that someone bequeaths in their Will to be given to their loved ones after they pass away. Often given to children, grandchildren, or other close friends and relatives, an inheritance can be made up of a financial endowment like cash, stocks, bonds, or other investments, as well as physical assets like real estate, automobiles, jewellery, art, antiques, and more. How they want their assets distributed is determined during the estate planning process which is when their Will is written up and their beneficiaries or heirs are designated.

Is your spouse entitled to inherited property?

If you’re involved in a separation or a divorce, there are unfortunately no absolute rules when it comes to which specific assets including inheritances will be included in assets to be divided up between parties. While Family Court may treat inheritances significantly differently between each case and there are no strict formulas for them to apply, in most cases, they will most likely consider any inheritances to be part of the joint assets to be divided up.

What it really comes down to is the court decides to attribute the weight of contributions made by each party and their ongoing financial circumstances. In the end, the only way to be sure about your finances post breakup is to have a Binding Financial Agreement or a prenup in place which clearly states who gets what if the relationship was to end.

When do the rules for inheritance change with a separation?

Inheritances in property settlements are generally treated differently by the court depending on what stage of the relationship it was received. Generally speaking, the earlier in a relationship it was received, the more likely it will be included in the shared asset pool after a separation.

Before the relationship

Inheritances that were received either before or very early on in the relationship are much more likely to be treated as an initial contribution by the beneficiary, especially in longer relationships.  In fact, early contributions of an inheritance can have little to no impact on the beneficiary’s property settlement entitlements, while contributions by the other party can also decrease the inheritance’s impact in court.

During

It is highly likely that any inheritances received during a relationship will have benefited both parties, so it would usually be treated as a monetary contribution towards their shared assets. That being said, the court may decide to take a different approach if it is clear the inheritance didn’t benefit them both.

Late

When someone becomes a beneficiary quite late in a relationship, or even after they’re separated but before divorce proceedings, it is much more difficult to speculate how the court might treat the inheritance. But because there is a diminished opportunity to use the inheritance as a contribution to the relationship, the court is far more likely to exclude it from the asset pool to be divided up between both parties.

How can AJB Stevens help?

Divorces and separations are often extremely emotional and stressful situations. Especially when it comes to the division assets and any disputes regarding the importance of an inheritance. In fact, things can all too quickly spiral into heated arguments and protracted legal battles, especially if either party feels they aren’t being treated fairly when splitting assets.

Because there is no single piece of advice or solution that covers all situations involving how inheritances are handled during a separation, you should always seek expert legal advice. One of our experienced family law solicitors from AJB Stevens can help create Consent Orders to ensure that all property is divided fairly and justly, which will make things easier for everybody involved.

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