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What will happen to my inheritance if I divorce?

Can your partner claim your inheritance if you divorce? This is a real worry for many divorcing couples and our family law solicitors are often asked to advise. If you would like a free initial consultation then contact our Family Law Advice Service for a free initial consultation.

Past Inheritances

The key questions are the size of the inheritance, when it was received, how it has been used and the financial needs of the parties and any children at the time of the divorce.

A recent court of Appeal case has set out some useful guidelines

• each case depends on the individual facts and circumstances
• if inherited assets are transferred to joint names or used for the benefit of the couple/family, they are likely to form part of the 'pot' of matrimonial assets available for division by the Court
• inherited assets received shortly before the breakdown of the marriage are less likely to be included in the matrimonial assets for division, depending on whether the other assets are sufficient to meet the couple’s or family’s future needs
• the needs of the family, especially where there are minor children, will be the overriding consideration and if the only way to meet those needs is by transferring inherited assets or assets deriving from them, to the other party, the Court may do this.

The details of the case were as follows:

All of the couple’s wealth came from shares inherited by the wife (W) when she was 15. W was 52 and the husband (H) was 49 at the time of the divorce. They had lived together from 1986 when the shares were worth £300,000, and married in 1991 when the value of the shares had increased to £700,000.

They had three children and the marriage broke down in 2007. At the time of the separation the shares were worth £28 million and at the time of the Court hearing they were worth £57 million. The shares had remained in W’s name at all times.

At the time of the hearing, H’s only asset was the marital home which had been purchased in his name and this had a value of £300,000. Despite W’s considerable wealth, the family lived fairly modestly. H and W did not work and lived on dividends from the shares. The family expenditure was about £79,000 per annum.

At the first hearing, W was ordered to pay H £5 million which was based on a generous assessment of his needs. H had put forward a case for a payment of £18 million, being about one-third of the assets.

The original award of £5 million was upheld by the Court of Appeal because it considered the original source of the shares important and, based on his needs, £5 million was a generous settlement for H.

Future Inheritances

Usually future inheritances are not taken into account when dealing with the financial aspects of a divorce.

But they may be if it is expected that the person making the bequest will die in the near future and the bequest is likely to be substantial.

Sometimes Courts may even adjourn the proceedings until the inheritance is received.

Conclusion

Inheritance and divorce is complicated and you must seek advice specific to your circumstances. The Courts have a wide power of discretion which can make predicting the outcome hard. Each case will turn on its facts and relevant circumstances.

For expert advice specific to you please contact our Family Law Advice Service .