Inheritance in Family Law

In a marriage or a de facto relationship it is not uncommon for one of the spouses to receive an inheritance. Inheritance you have received, or are expected to receive, may be included as an asset available for division in a family law dispute. A common misconception is that inheritances can fall into a protected category and are separate to the asset pool available for distribution between warring spouses.

You may have received an inheritance from one or both of your parents or another family member, and you feel therefore that in the property settlement, the entirety of the inheritance should be returned to you.

Your ex-spouse may view this differently, thinking instead that the inheritance is an asset that benefited your whole family or both of you as a couple.

They may feel that excluding the inheritance from the divisible pool of assets will not give them their fair entitlements in the property settlement.

When the Inheritance was Received

If an inheritance is received before the start of the relationship or around the time the relationship started, it will be considered an initial contribution by that party. The value of the inheritance will not be separated from the asset pool.

If an inheritance is received during the relationship, how it is treated will depend on how the money was applied and the intentions of the benefactor. If the money is spent on improving the family home, paying for the day to day expenses of the family and generally used for the benefit of both parties, it will be treated as a financial contribution by the party who received it.

If an inheritance is received late in the relationship or after separation, it will generally not be viewed as a contribution to the asset pool. Such an inheritance may be protected from distribution between the parties.

The extent to which an actual inheritance or a prospective inheritance will impact on a property settlement will depend on the individual case.

If you would like to find out more about your rights and options or have a Binding Financial Agreement drafted, Straits Lawyers are now offering online services at https://straits-lawyers.square.site/product/family-law-binding-financial-agreement-consultation-bfa-/5?cs=true.

Alternatively, you could simply send us an email at info@straitslawyers.com or give us a call on 8410 9069 to arrange an appointment for an online interview.

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.