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What happens about the inheritance?

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Clients will often ask me about how an inheritance is treated on divorce.  The advice depends on several things as I shall explain below.  I have included reference to the leading cases as they show how the law has developed in recent years.

The law on this area is complex as there is a wide discretion to consider all the circumstances of the case.  This means that there will usually be a range of possible outcomes which may be considered fair rather than there being just one answer.

In all cases it is necessary to look at what are known as the Section 25 factors.  These are a list of things such as the incomes and financial resources of the parties, their financial (usually housing) needs and the length of the marriage.  Inheritance is not specifically mentioned but will fall into the category of financial resources.

Meeting ‘Needs’ 

There is a distinction between marital and non-marital property (such as inheritance) and this was considered in the leading case of White v White (2000) UKHL 54 where Lord Nicholls stated that inherited assets should be treated differently from marital assets on divorce, but only where the needs of both parties can be met from the marital assets alone.

The distinction was also considered in the case of Charman v Charman (2007) EWCA Civ 503 when it was stated that, where one person requires a greater proportion of the marital assets based on their ‘needs’ than they would receive by an equal sharing, then a division based on the ‘needs’ should prevail.  What this means is that in terms of inheritance is that, if there are insufficient marital assets to meet the needs of the parties and any children, the inheritance or part of it can be brought into play.

Timing and Mingling

In the case of Miller and MacFarlane (2006) UKHL 24 the subject of non-marital property was considered, and Lord Nicholls said that the duration of the marriage will be highly relevant.  The importance of the source of the asset (such as inheritance) will therefore dimmish over time.

In the case of K v L (2011) EWHC Civ 550 inheritance was a central issue and LJ Wilson concluded that the importance of the source of an asset may diminish over time and gave some examples of where this may apply:-

  • Where the extent of the marital property acquired over time is such that it diminishes the significance of the initial contribution (such as inheritance).

  • Where over time the non-marital property (such as inheritance) has been mingled with marital property.

  • Where the non-marital property (such as inheritance) has been used to purchase or has been invested in the family home.

What does it all mean?

An inheritance may be pulled into the divorce if:

  • It has been mingled in with marital property such as using it towards a house purchase.

  • The timing of the inheritance is such that it is not a recent event.

  • The financial needs of the parties cannot be met with bringing some or all of it into the pot.

What stands out is that, if the financial and housing needs of the parties cannot be met from the marital property available, the inheritance can be taken into account.

What about a future inheritance?

It is unusual for a future inheritance to be taken into account as there may be uncertainty over the amount or a person could change his or her Will.  Further, it is only possible to look at financial resources available in the foreseeable future.  

Specialist Advice

The law in this area is very discretionary and there is no one right answer.  The experience of a specialist family lawyer is therefore vital where an inheritance is involved in a divorce.  Vingoe Family Law has solicitors who specialise in the financial implications of divorce and are happy to advise on any questions.

 

Anthony Vingoe

Specialist Financial Remedy Solicitor

9th June 2023

 

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