If you have recently separated, or are contemplating separating, from your spouse you may be concerned about the division of marital assets especially if you’ve inherited money or property during the course of the marriage, or are likely to do so prior to getting divorced.
Below we look at how any past legacy or future inheritance prospects are likely to be divided or factored in on divorce, and what steps you can take to protect your financial interests.
How will any inheritance be divided on divorce?
In England and Wales, any money or other assets inherited either before or during your marriage are not automatically excluded from the matrimonial finance ‘pot’. This means that any legacy will not automatically be ring-fenced and, as such, may have to be shared between you and your former spouse or civil partner on divorce or dissolution of the civil partnership.
That said, every case is different and therefore whether will have to share your inherited wealth on divorce or not depends on your specific circumstances. The primary consideration will be the welfare of any dependent children and the needs of the parties, although other factors could include the size of the inheritance, when this was received, the manner in which the inheritance was dealt with during the marriage etc..
Will any future inheritance be taken into account?
With regard to any future inheritance, this will not usually be taken into consideration when the financial aspects of divorce are dealt with by the court. This is because a potential legacy cannot usually be determined with any degree of certainty, where a testator could easily change their mind. It can also be difficult to gauge the life expectancy of any testator.
That said, albeit exceptionally, where there is an expectation of a significant inheritance after separation and a divorcing spouse is likely to receive that inheritance imminently, the court may adjourn part of a financial application on divorce until the inheritance is received.
How can any inheritance be protected on divorce?
If you wish to protect inherited wealth in the event of divorce, you should consider entering into a pre- or post-nuptial agreement with your spouse or civil partner. This does not automatically protect any legacy if you later separate and subsequently divorce, but if entered into freely and fairly by both parties it may be taken into account by the court.
In many cases, however, protecting any inheritance is not something that a couple will seriously contemplate at the time it is received. It is always possible for parties to reach agreement without the involvement of the court, by way of voluntary agreement and by seeking expert legal advice from a divorce specialist at the earliest possible opportunity, this can help you to navigate this often fraught and stressful process, and to help negotiate a settlement to safeguard your financial future.
Legal disclaimer
The matters contained herein are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its’ accuracy, and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should always be sought.