The division of property and assets is one of the most difficult aspects to resolve when a relationship ends
Divorce and inheritance don’t always work well together and can lead to conflict.
Hiring a Perth family lawyer who is experienced in divorce proceedings is the best way to make sure things go smoothly.
There are many things to consider, and each situation is different.
You might have an inheritance from your parents, or another family member. In this case, you believe that the property settlement should return the entire inheritance to you.
This may be viewed differently by your ex-spouse. Who might see the inheritance as an asset that benefits all your family, or you both as a couple.
They may feel that they will lose their fair share of the property settlement if the inheritance is taken from the divisible assets pool.
The problem with inheritance and property settlements is that there isn’t a clear way to determine who gets what and how it is managed.
Although it is impossible to predict how your situation will resolve, there are some things you can do.
Relevant considerations regarding the laws on inheritance and divorce
An inheritance can be divided if it is received by you or your spouse during divorce proceedings.
It is important to note that the keyword used in the sentence above is “ can”.
When deciding whether an inheritance may be taken in divorce proceedings, there are some things to keep in mind:
- When was the inheritance received?
- Who received the inheritance
- How long did the relationship last?
- How did each person contribute to the relationship?
- What is the value and relationship of the inheritance to the overall asset pool?
It is important to answer the questions above to determine if the inheritance should be left to the person who received it or if it should be split between the spouses.
Who Received the Inheritance
This is an important question in inheritance and property settlements.
In most cases, one person in a couple receives the inheritance.
The testator could have left an inheritance that was specified in their will to both spouses.
An inheritance in such a situation is a shared property and a contribution both parties have made.
It will be included in the divisible pool of assets, but only if the wishes are clear.
When was the inheritance received?
Inheritances can be treated differently in property settlements based on when they were received within a marriage or de facto relationship.
Inheritances received very early in a relationship, before the relationship started or before the couple started living together, are more likely to be treated as an initial contributor to marriage by the beneficiary of the inheritance.
Inheritances that are given at the beginning of a long relationship can have little to no effect on the beneficiary’s rights in the property settlement.
Other contributions by the party may lessen the impact of the inheritance.
According to our property settlement lawyers, the sooner the inheritance is received, the greater the chance it will be included in a pool of assets that can be shared between the spouses in the event of divorce.
If an inheritance was given to a couple, it’s highly probable that it was used for both spouses’ benefit, such as for holidays, renovating or buying a home, and other household expenses.
This would mean that the inheritance would be treated as a monetary gift to the couple’s assets.
The court may adopt a different approach if it is obvious that the inheritance was not for the couple’s benefit.
Some people might become beneficiaries of an inheritance after their marriage ends or before they get divorced.
It is difficult to predict how the court will handle the inheritance.
The court will likely exclude inheritance from the pool of assets that are divided between the parties because it is less likely that the couple can use the inheritance to contribute to the relationship.
Property settlements and inheritances are always subject to the fact that inheritance is used for mutual benefit by the beneficiaries and their spouses. This can have an impact on how the inheritance will be treated as an asset and contribution.
Value of the Inheritance
Depending on the inheritance’s value, the problem of including or dividing an inheritance during a divorce could change.
In some cases, an inheritance received by one of the couples in a property settlement is more valuable than the rest of their assets.
This would mean that if the beneficiary retained the inheritance completely for themselves, their spouse would not receive a fair and equitable result from the property division as their contributions would not have been sufficiently recognised.
If the inheritance is larger than the asset pool, then the inheritance could be added to ensure an equitable outcome for both.
Relationship with the Testator
The exceptional circumstances of the relationship between the testator and the parties may complicate the process of determining whether an inheritance should be included or excluded from the property pools.
The testator may have left an inheritance to one spouse, but the other spouse could have shared a special relationship.
It is possible that the testator lived with both parents and was cared for by them, particularly if they were parents.
The testator’s intentions may not have been recorded in their will. This could affect the court’s decision to consider the inheritance in divorce proceedings.
Options to protect an inheritance received during a relationship
A financial agreement is the best way to protect an inheritance that has been received by one party during a relationship. For this to happen, your partner must consent, provided you are still together.
Financial agreements can be made to protect only the inheritance received. All other assets and property are excluded from the agreement.
Financial agreements are not always perfect, but if they are drafted according to the legal requirements, they can be used to provide protection under the Family Law system to protect inheritances.
How can a lawyer help with property and inheritance matters?
A family divorce lawyer who specialises in property settlements, such as our team of expert family lawyers in Perth at Burra-Robinson Family Lawyers, can help you understand your legal rights and requirements when it comes to inheritance matters.
Legal advice is the best way to go, regardless of whether you have received an inheritance during your relationship and want to protect it or you have recently separated and received an inheritance.
Although no one can predict how a property settlement will turn out in court, an experienced family divorce lawyer can give you information about the likely outcomes for your circumstances.
Get help from a Perth family lawyer.
We recommend that you get legal advice from an experienced family divorce lawyer if you need assistance regarding an inheritance matter, anticipate receiving one, or are thinking of separation.
Burra-Robinson Family Lawyers are experts in property settlements. This includes matters relating to inheritances received in relationships and the drafting and preparation of financial arrangements to protect inheritance.