We are commonly asked by our clients what will happen to an inheritance on divorce, or one they anticipate receiving in the near future. If during negotiations the inclusion (or exclusion) of inheritance cannot be agreed and financial matters proceed to Court, a number of factors will be considered by the Judge:
- Whether the needs of the parties will be met if the inheritance is excluded
A Court is unlikely to order that one party’s inheritance is to be excluded from the matrimonial pot if by doing so, there is insufficient capital left to meet the needs of the other party. For example, if by excluding the husband’s £500,000 inheritance, only £200,000 would remain in the matrimonial pot to house both parties.
In cases where the overall pot is much larger and both parties would be comfortably provided for without inclusion of the inheritance, a Court is more likely to find that it can be excluded.
- Whether the inheritance has been mingled
This is also an important factor that will be taken into consideration by the Court. If an inheritance has been mingled with matrimonial funds, for example by using it to purchase a property in joint names, a Court may be reluctant to then find that it should not form part of the matrimonial pot. By contrast, if the inheritance has been kept entirely separate from the matrimonial funds and assets, a Court could be more willing to consider excluding it.
- When the inheritance was received
Seeking to exclude an inheritance received by one party several years ago will prove more difficult to exclude than one received recently, especially if the inheritance was post-separation. It is becoming increasingly accepted by the matrimonial Courts that, subject to the factors above and the overall facts of the case, an inheritance received by one party after the date of separation should be excluded.