Dividing finances during a divorce can be one of the most complex and emotionally challenging aspects of the separation process. One question that frequently arises is whether an inheritance received before or during the marriage can be claimed by a former spouse.
Many people assume that inheritance automatically remains separate from matrimonial assets. However, the legal position in England and Wales is more nuanced. While inheritance is often treated differently from assets acquired during the marriage, it is not always protected from financial claims.
Whether an inheritance will be included in a divorce settlement depends on several factors, including when it was received, how it was used, the parties’ financial needs, and the overall circumstances of the case.
Is Inheritance Automatically Excluded From Divorce Settlements?
The short answer is no.
When determining financial settlements on divorce, the courts in England and Wales have wide discretion under the Matrimonial Causes Act 1973. The court’s primary objective is to achieve a fair outcome, taking into account all relevant circumstances.
Inheritance is generally considered a form of non-matrimonial property. This means it is different from assets accumulated through the efforts of both spouses during the marriage, such as family homes, savings, pensions and business interests.
However, simply because an asset is categorised as non-matrimonial does not mean it is automatically protected.
The court will consider all available resources when deciding how assets should be divided. In some cases, inherited wealth may remain with the beneficiary spouse. In others, it may be taken into account when assessing financial claims.
Each case is assessed on its own facts, which is why specialist legal advice is so important.
Does It Matter When the Inheritance Was Received?
The timing of an inheritance can be highly relevant.
Where an inheritance was received before the marriage and kept entirely separate from the couple’s finances, there is often a stronger argument that it should remain the property of the recipient.
Similarly, an inheritance received after separation may be less likely to form part of the assets available for division.
However, if inherited funds have been mixed with matrimonial assets, the position can become more complicated.
For example, issues may arise where inherited money has been used to:
- Purchase or renovate the family home
- Repay a joint mortgage
- Fund family expenses
- Invest in a family business
- Contribute to joint savings
When inherited assets become integrated into family finances, they may become more difficult to distinguish from matrimonial property.
The longer the marriage and the greater the extent to which inherited funds have been used for family purposes, the more likely it is that the inheritance may be relevant when financial claims are assessed.
How Do Financial Needs Affect Inheritance Claims?
One of the most important principles in divorce law is that financial needs often take priority over the source of an asset.
Even where an inheritance is clearly non-matrimonial, the court may still consider it if there are insufficient matrimonial assets available to meet the reasonable needs of both parties.
For example, if a couple has limited assets and one spouse has significant inherited wealth, the court may conclude that the inheritance should be considered when ensuring suitable housing and financial provision for the other spouse or any children.
This does not necessarily mean the inheritance will be divided equally. Instead, the court will consider what is required to achieve fairness in the circumstances.
Factors the court may take into account include:
- The length of the marriage
- The age of the parties
- The standard of living during the marriage
- The financial needs of each party
- The welfare of any children
- The size of the inheritance compared with other assets
In cases involving substantial wealth, inheritance may sometimes remain largely untouched. In more modest cases, financial needs may justify a greater degree of sharing.
Can Future Inheritance Be Taken Into Account?
Many people are concerned about inheritance they expect to receive in the future.
Generally speaking, future inheritance that has not yet been received is not treated in the same way as existing assets.
However, the court can consider anticipated resources where there is evidence that an inheritance is likely to be received within a reasonably foreseeable period.
This tends to arise in exceptional circumstances rather than routine cases.
For example, if one party is expected to receive a significant inheritance imminently, the court may take this into account when considering the overall financial picture.
The level of certainty surrounding the anticipated inheritance will be an important factor.
Speculative or uncertain future inheritances are less likely to influence the outcome of a financial settlement.
How Can Inheritance Be Protected?
While no strategy can guarantee complete protection, there are steps individuals can take to reduce the risk of inheritance becoming subject to financial claims.
Keeping inherited funds separate from joint finances may strengthen arguments that the inheritance should remain non-matrimonial.
Some individuals also choose to enter into pre-nuptial or post-nuptial agreements that address inherited assets. While these agreements are not automatically binding in England and Wales, courts increasingly give significant weight to properly prepared agreements where they are considered fair.
Obtaining legal advice before making major decisions involving inherited assets can also help protect long-term interests.
Where divorce proceedings are already underway, early legal advice is particularly important to ensure inheritance issues are properly addressed.
Conclusion
Inheritance is often treated differently from matrimonial assets during divorce proceedings, but it is not automatically protected from financial claims.
The court’s overriding objective is to achieve a fair outcome, and inheritance may be taken into account depending on the circumstances of the case. Factors such as financial needs, the length of the marriage, and how the inheritance has been used can all influence the outcome.
Because every case is unique, obtaining specialist legal advice is essential if inheritance forms part of your financial situation.
Need Advice About Inheritance and Divorce?
If you are concerned about protecting an inheritance during divorce proceedings, or if you believe inherited assets should be considered as part of a financial settlement, Penerley can help. Our experienced family law solicitors provide practical and tailored advice to clients across England and Wales. Contact Penerley today to discuss your circumstances and understand your options.
