Do I have to give my ex-partner my inheritance?
When married couples, or those in a civil partnership, go through the divorce or dissolution process their financial affairs need to be resolved alongside.
One area which can be particularly emotive and difficult is the assets one or both spouses may have inherited. Even more sensitive can be the money or assets which are shortly due to be inherited following the death of a loved one. The question is whether such assets should be part of the available pot to be divided between them.
The law makes it clear that the resources from all sources must be disclosed. Consequently, any pending inheritance must be divulged, any family trusts of which one spouse may be a beneficiary must be revealed and any other wealth inherited or otherwise must be set out. Arguments from case law can be made about whether or not such assets should be regarded as part of the matrimonial pot, and therefore available for distribution. For example if the inherited asset is, a farming estate which has been in one spouse's family for generations and the intention is to continue to pass it down the generations, the court may well regard it as largely outside of the matrimonial pot.
By contrast, if one spouse inherited shares and the income derived from them was paid into a joint account which benefitted both spouses, it would be much harder to argue in those circumstances that they should be left out of the pot. If the shares had always been kept separate, and let's say the dividends had been paid into a family trust fund for one spouse only, it would be much easier to argue that they should be ring-fenced away from the other assets.
If the reality of the situation is that recourse must be had to all resources, inherited or otherwise, to meet the needs of both spouses, and any children, then these needs will trump any arguments about the source of the wealth. If, for example, the couple have significant debts and one of them is about to inherit a large cash sum, this will be taken into account as it will be needed to repay debts. This may understandably feel unfair to the spouse about to inherit but there it is.
In order to avoid arguments about inherited assets it is possible to enter into a pre-nuptial agreement, or a post-nuptial agreement, setting out what is to happen to the assets upon any later divorce. This is the best way to try to ensure inherited and family wealth remains protected.
If you have any queries regarding divorce and the division of assets, please contact Sarah French or another member of the Blake Morgan family team.