IS MY FORMER PARTNER ENTITLED TO MY INHERITANCE?
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There is a common misconception in family law that any inheritance you receive is more or less yours to keep and cannot be included in the property pool to be divided between you and your former partner. However, inheritance received during the relationship, post-separation and even an expected inheritance that you haven’t yet received, needs to be considered for family law. Whether the inheritance is ultimately included in the property pool to be divided between you and your former partner depends on the specific nature and circumstances of your relationship and the contributions made during it and afterwards.
- When did you receive the inheritance?
As a general rule, any inheritance that has already been received is included in the spouses asset pool. It is usually regarded as a financial contribution from the party who receives it. If the inheritance is received early on in a long relationship and/or where there are children to the relationship, it is likely that you will not receive credit (in a monetary sense) equal to the value of the inheritance in a property division. However, you will receive substantial ‘credit’ at the point of assessing contributions from your side of the marriage. The significance of the “inheritance contribution” may be overtaken by other contributions over time. It depends, in part, on the size of the inheritance compared to the available pool of assets for division between you and your spouse.The later in the relationship than an inheritance is received, the more likely it is that you will receive a greater contribution based adjustment as part of your property settlement because of the inheritance contribution.
- Have you actually received the inheritance?In general, you must have already received the inheritance for it to be considered as an “asset” which then might be included in what is to be divided between you and your former partner. However, there are some special circumstances where the Court will consider a prospective inheritance. This is typically where one partner will receive a significant inheritance in the very near future.For example, John (not his real name) the former husband of our client, Jane (not her real name), was to receive $600,000 from his aunt’s estate when she passed away. At the time of the family law negotiations, his Aunt was 90 and she no longer had the mental capacity to change her will. As a result, we were able to argue for Jane that the Court should include John’s expected inheritance of $600,000 in the pool of assets to be divided between himself and our client even though he had not yet received it, because it was certain he would receive it and soon.
- What if the inheritance is received after we separated?
Inheritance received after separation is still included in the property pool to be divided between you and your former partner. However, the assessment of it as a financial contribution is much more important. The other spouse cannot be said to have made much or possibly any contribution to the inheritance received after separation.
It is not very popular with Judges at the moment, but in suitable cases – where an inheritance arrives late in a relationship and from a source largely uknown to the other spouse – it is open to argue that the whole inheritance be regarded as a ‘separate pool’ of assets apart from the marital pool of assets. You can argue that your spouse accordingly should have no entitlement to any of it.
As you can see, inheritance in family law matters is a complex subject. Our family lawyers are experts in determining how an inheritance will be dealt with by the Courts. If you or your former partner have received, or are about to receive, an inheritance, we strongly recommend that you contact one of our family lawyers for advice.
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Click here if you would like more information related your unique circumstances. Separating couples have a plethora of issues to sort out; who gets what, where to live, when the kids stay with each parent, who pays the mortgage in the meantime….. the list can be long...