Historically the question of whether money is really the root of all evil has been a matter of debate but within the context of family law, there is no doubt that disagreements over finances frequently morph into something worse. There are many reasons these heated and bitter arguments over “who gets what” erupt when couples separate. In some cases, for example, fights begin when former spouses or partners can’t agree on what should happen to an inheritance.
Here’s what you should know about how the courts view a situation in which only one of you has received (or is soon likely to receive) the inheritance in question.
Because it is legally categorised as property, any inheritance you receive must be included in relevant negotiations. However, it is important to note that how it will be treated depends on your specific circumstances.
In general an inheritance will be treated as an asset that can be split between the two of you, or as an asset (financial resource or benefit) belonging only to the recipient. A cash inheritance will most likely be viewed as the latter. If it is, the court will likely determine that you (as the recipient) are in a better financial position than your former husband or spouse, and act accordingly.
In reaching its decision, the court may consider when you received (or will receive) the inheritance and how you used it. As an example, let’s assume you received a considerable inheritance while you were married. Now let’s also assume that you used the money for household expenses, family holidays, home improvements and so forth. In these circumstances, the court could reasonably find that this was simply your contribution to the marriage and issue an order accordingly.
On the other hand, let’s consider a scenario in which you inherited some money from your grandmother before you got married. Let’s say you weren’t living with the man or woman you eventually married, and he or she was aware of the inheritance. However, you kept the money in your own bank account and never used it for any relevant expenses or activities before or during your marriage. In this case, the court could reasonably find that the inheritance was always yours before the relationship, meaning you brought it in as an initial contribution. If you never used it and always kept it separate, depending on your partner’s circumstances, you may be able to keep it.
Other factors that the court may take into consideration are:
- Value: The amount inherited or worth of the inheritance in comparison with the total asset pool.
- Contributions: Whether the person who didn’t receive the inheritance contributed to it.
- Purpose: The intended use of the money, as expressed in a will or any other specific instructions.
- The extent of care: How much the person who did not receive the inheritance helped care for the deceased, if at all.
Of course the outcome in your case will be based on the court’s assessment of your specific circumstances. Having said that, here are a few summaries of relevant cases to help you understand how the court reaches various decisions.
First let’s look at a case called Elgabri & Elgabri. In this particular matter, the husband received an inheritance shortly before the couple separated and the judge excluded it from the general pool of marital assets. Upon further assessment of the evidence, the judge found that the husband and wife made equal contributions to the remaining assets. However, the judge also determined the wife should have an additional percentage of the assets because her husband’s inheritance gave him a financial advantage.
In another case called Elgin v Elgin, the court found that an inheritance received roughly one decade prior to the couple’s separation was insignificant in comparison to the value of the total asset pool. Specifically, it accounted for less than five percent of all available property by the time the couple separated. The judge in this case also decided that each spouse made equal contributions to marital assets. As a result, each person received an equal share of the assets.
Finally, in Sinclair v Sinclair, the wife received a considerable inheritance several years before she and her husband separated. However, the court determined that most of the assets weren’t related to direct contributions made by either person, and the wife received a significant percentage of the total assets.
In summary, it doesn’t matter whether you’ve received a small inheritance or you stand to inherit a fortune. If you are separated, it will be legally classified as property. Depending on your specific circumstances, you may be allowed to keep all of it, or it may be included in the marital asset pool. In any case, it is essential that you obtain clear legal advice on your specific circumstances.