While dealing with inheritance in divorce settlements in Australia, some questions that are frequently asked are:

Can I keep any inheritance I receive?

or

Can I keep any inheritance I receive after divorce?

or also

What about future inheritances that I am likely to receive after divorce?

It is quite common for people to obtain an inheritance before during or after a marriage/ de facto relationship. An inheritance is usually viewed as property – it cannot be automatically excluded from Family Law settlements. Of course, every case is different, and the manner in which an inheritance is relevant will depend on the individual circumstances.  Some relevant issues are as follows:

  • When was the inheritance obtained?
    • For example, in some situations, particularly where the inheritance is obtained after separation, it can be quarantined. It can still however be relevant to other issues related issues which can affect the property settlement.
    • Alternatively, if the inheritance was obtained early on in a long relationship, less weight may be placed on it. This is sometimes dependant on the amount of the inheritance and how it was applied.
  • Was the inheritance left to the couple or just to one of them?
    • Usually, a testator will bequeath property one party (often a son or daughter) as opposed to the bequest being expressly made to the couple (ie: their child and in law) In the former situation, the person who received the bequest can assert that the inheritance is part of their financial contribution to the family.
    • In some situations, where both spouses have assisted the testator, it can be argued that the bequest was meant for both of them.
  • Other relevant considerations include the duration of the relationship and the manner in which the inheritance is used.

The expectation of an inheritance can also be relevant in Family Law. This will usually depend on the wording of the will and the mental capacity of the testator. For example, if Mary is the sole beneficiary of her elderly frail mother’s will, and her mother has lost testamentary capacity, Mary’s Husband might seek for this prospective inheritance to be considered in their property settlement.

In some circumstances, Family Law court proceedings might be adjourned until an interest in an estate has vested.

The treatment of inheritances in family law property issues can be complicated and therefore it is important to obtain specialised Family Law advice. In some situations, it is possible to mitigate an inheritance being distributed after a separation. If you are worried about how your current or prospective inheritance will be treated in the context of a separation, contact our office to discuss your concerns about inheritance in divorce settlements with our Melbourne family lawyers.