September 19, 2014

Can my ex claim my inheritance? Four key questions answered

In tough economic times a windfall in the form of a legacy left in a will can give the family coffers a boost.  However, what happens to that inheritance if a couple divorce?

It may come as a surprise to many people that an ex could be entitled to a share of granny’s bequest. Here we answer four questions about the circumstances in which an inheritance left to one party could be claimed by the other.

  1. Can a partner claim the other partner’s inheritance when they get divorced?

Rather than use the word “claim”, an inheritance forms part of the “pot” of assets to be divided up in a divorce and will be included only if it is deemed “fair” to do so. If the needs of the parties, and any children, cannot be met without using a legacy, then it is likely to be included. Each case is fact specific.

If an inheritance was used some time before separation, for example, towards buying the matrimonial home, or to pay off the mortgage, then it is likely to be included in the pot.

  1. Why is it fair that one person’s inheritance has to be shared with their ex?

The law states that the needs of both parties have to be met from the available resources, whatever their origin. Therefore, an inheritance might be included in the joint assets if, for example, there is no other way to fund a home for a mother who will be a carer of any children or if it has been intermingled with jointly built-up assets.

  1. Are future inheritances considered where sharing marital assets?

If one person is likely to inherit money in the near future – for example, from a sick, elderly relative or dying family friend – then a future legacy could be included in the pot of funds to be divided. However, whether such an inheritance would be considered depends in particular on how certain is the receipt of the anticipated legacy, and how far into the future it will be received.

In some cases it may be that settling financial issues is adjourned until an inheritance is received.  However, while there is no absolute timescale, the key phrase in law regarding any future resources is “the foreseeable future”.

  1. How can inheritances be protected from inclusion in divorce assets?

Drawing up a pre-nuptial or post-nuptial agreement excluding any legacies might carry some weight if a court considers the arrangement to be fair and is assured that both parties agree and have not been bullied into signing.

Anyone who expects to inherit money or assets in the future should encourage the donor to look at trust or estate planning, which can help to protect legacies.

With the average house outside London now worth £272,000, many more people are likely to inherit substantial sums of money. Therefore, whether you are married, separating or cohabitating it makes sound financial sense to take professional advice on how best to protect potential future assets.

If you have any concerns or questions about how to protect an inheritance in your divorce call us on 0113 246 0055, leave us a comment below or drop us an e-mail. You can also follow us on Twitter: @helpwithdivorce.