UK: Divorce Has Wide-Reaching Financial Implications, Including When It Comes To Inheritance. A Lot Of Confusion Exists Over What The Consequences Are For Property Or Assets You Have Inherited During Your Marriage.
Divorce has wide-reaching financial implications, including when
it comes to inheritance. A lot of confusion exists over what the
consequences are for property or assets you have inherited during
In England and Wales, property and assets acquired through work,
business or investment are usually put into the 'matrimonial
pot' and divided equally on divorce. As a general rule, the
Court's view is that there is a difference between assets and
property which have been amassed by the parties during the marriage
by virtue of their own endeavors, and assets which have been
What happens if I have inherited assets during the
Money or property you have inherited are not automatically
excluded from the assets to be divided. There are a number of
factors that the Court will take into consideration, such as the
size of inheritance, when you received the inheritance, length of
marriage, how it was dealt with during marriage and the financial
needs of the parties.
What happens if the inheritance has been used during the
Intermingling of inherited assets within the matrimonial assets
could give rise to a claim that the inheritance should be treated
as part of the matrimonial pot and capable of sharing on divorce.
This also applies if the inherited assets are transferred to joint
names or used for the benefit of the family.
What if the exclusion of the inherited assets puts one party in
a much stronger financial position?
Inheritance can be treated as a matrimonial asset if both
parties' "needs" require the same to meet capital or
income needs. Upon divorce, the extent of a party's needs can
vary hugely, and will depend on many factors including the length
of marriage, standard of living enjoyed in the marriage and most
importantly, the arrangements which have been made concerning the
parties' children. Furthermore, a Court can be persuaded to
award more matrimonial assets to one party on the basis that the
other party has access to inheritance as an alternative resource to
make sure they can live.
What options are there to protect my inherited assets?
The ring-fencing of inherited assets away from the matrimonial
pot is more likely if the inherited assets have been kept separate
and are not required to meet the parties' needs on divorce.
Upon divorce, a financial settlement will protect you from any
future claims your ex-spouse may make if you inherit property or
assets at a later date.
If you or your spouse have recently inherited and you are
considering a separation, taking advice on your legal options is
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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