It depends.
There are two types of assets when parties to a divorce are dealing with their financial separation:
Matrimonial Assets
Assets that have been acquired by a party during the marriage and that form part of the pot for sharing. These can be property, savings, shared investments, specific or luxury items of value such as art, holiday homes, boats etc
Non-Matrimonial Assets
Assets bought into the marriage or acquired by one party before, during or post separation that is from a source outside of the marriage and therefore not part of the marital acquest. Inheritances is the third strand of non matrimonial asset.
Where does Inheritance Fall?
Inheritance is one of those tricky areas in family law, where the answer doesn’t land on one side of the fence and to determine whether inheritance will form part of the marital pot i.e. capable of being shared or whether it will be ring fenced and treated as ‘non matrimonial’
However, many would consider a starting point that sees the inheritance presumptively in the pot as unfair on the party who either bought it into the marriage or has acquired it during the marriage or post separation.
So, the starting point is generally that any inheritance is outside of the pot and therefore treated as non matrimonial.
What Factors are Relevant?
How the court treats inheritance will depend on the following:
- Timing i.e. was it pre marriage, during the marriage or post separation?
- Source – what is the nature and source of the inheritance?
- How the inheritance has been treated by the parties? Has it been mingled with other assets?
- How long have the parties been married?
This is where the specific facts of the case can turn the presumption on its head. If, for example, the inheritance has been received during the course of the marriage and in whole or part used for the benefit of the family (for examples spent on renovating a family home, purchasing a property in joint names etc) it can be considered matrimonial.
How is the Treatment of Inheritance Impacted by the Parties’ Financial Needs?
In the vast majority of cases, the court’s enquiry will start and end with the parties’ needs. In line with the ‘sharing principle’ parties are generally entitled to an equal division of the marital assets and non marital assets are retained by the party who acquired them unless then is good reason to the contrary (which would be identified by the points above). Meeting an individuals’ financial needs (by way of housing or income) is generally the only justification for ‘invading’ inheritance and allowing a spouses claim to sharing to succeed. Even then, it can only be to the extent that is required to meet needs, and nothing beyond that.
In considering needs the court said in Charman v Charman that the principle of need requires consideration of the financial needs, obligations and responsibilities of the parties, of the standard of living enjoyed by the family before the breakdown of the marriage, of the age of each party or any physical or mental disability.
The Family Justice Council Guidance on Financial Needs makes it clear that
‘In an appropriate case, typically a long marriage, and subject to sufficient financial resources being available, courts have taken the view that the lifestyle (i.e. ‘standard of living’) the couple had together should be reflected, as far as possible, in the sort of level of income and housing each should have as a single person afterwards. So too it is generally accepted that it is not appropriate for the divorce to entail a sudden and dramatic disparity in the parties’ lifestyle.’
If inheritance is taken into account, it is not necessarily the case that it will be shared equally and it will be very fact specific. Depending on the nature, type of asset and its value it can form a significant area of dispute in determining what is and is not capable of being shared.
We Can Help
The distinction between matrimonial and non-matrimonial property and how inheritance can fall within this can be complex. You can also see our blog on Non matrimonial property here It is therefore important when dealing with inheritances and other forms of non-matrimonial property that you seek specialist legal advice to discuss how that asset or money might be treated by the court.
Such issues require curious scrutiny, experience, and a clear understanding of family law. Our specialist team can provide practical guidance and legal support to help you understand these issues and the role they hold in your financial arrangements and ultimately negotiations.
If you are concerned about whether an asset is non matrimonial or are concerned about the claims that can be made by your spouse, contact us to discuss your options.
