Protecting inheritance – before, during and after divorce

Inheritance received during a marriage is likely to be considered a joint asset if it has contributed to or has mingled with the marital finances. Inheritance may, therefore, be considered as part of a financial settlement on divorce, although there may be an argument for ring-fencing it. 

There are several factors that can put inheritance at risk, for example the length of the marriage and a spouse’s financial needs. Typically, if the marriage is considered to be a long marriage, the Court may determine that an inheritance should form part of the matrimonial pot and, therefore, risks being shared between parties to ensure that there is an equal division of assets to meet both of their needs. 

Inheritance may, in some circumstances, be ring-fenced. For example, if an inheritance is received prior to the marriage, or following separation, it may be protected if it is kept separate from joint finances and is only for personal use. However, the Court remains at liberty to include the inheritance within a financial settlement, should it be considered that sharing the inheritance will provide a fair outcome. 

Future inheritance prospects, however, are normally protected so long as a Consent Order is in place upon divorce and, therefore, the parties’ financial ties to one another are severed.   

It is important to consider protecting your inheritance by seeking legal advice prior to marriage and upon separation or divorce. For more information contact our family law team.