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4 min read.

 

Inheritance can often become a ‘sticking point’ during separation or divorce, with one party concerned about the other making claims on their received or prospective inheritances.

Some may argue that the law should protect inheritances for the individual, but the issue is more complex. Individuals can take steps to minimise the risk of including inherited assets in divorce settlements. We will discuss some of these within this article.

The difference between Matrimonial and Non-Matrimonial Property

The law differentiates matrimonial assets, which both parties acquire through their joint efforts during the marriage, from non-matrimonial assets, such as inheritances or gifts an individual receives.

The definitions of these assets are as follows:

Matrimonial Property

The “sharing principle” applies to matrimonial assets, meaning both parties typically divide them equally during a divorce, though exceptions do exist.

Non-Matrimonial Property

Courts generally consider inheritances as non-matrimonial property and do not automatically subject them to sharing unless specific circumstances apply. They often allow the original recipient to keep these assets, as long as the other party’s financial needs can be met without accessing them.

Safeguarding your inheritance

Here are the best practices* for safeguarding your inheritance:

Keep your inheritances separate

Maintain accurate records

Strategic estate planning

Seek legal advice

Pre-Nuptial or Post-Nuptial Agreements

Additionally, when one partner inherits assets from a family member or loved one, they may also want to ensure that this inheritance is passed down to their children.

Protect your children’s inheritance during divorce

Taking proactive steps early can significantly reduce the risk of your inherited assets becoming part of marital property during a divorce. So, what can you do to protect your children’s inheritance from risk during divorce? Let’s take a look…

Keep inherited property separate from marital assets

To safeguard inherited assets, avoid mixing them with jointly owned marital property. Achieve this by:

By maintaining a clear distinction between marital and inherited assets, you can help ensure that only your children will benefit from the inheritance in the future.

Establish a Trust for your children

Whether through careful asset management, legal agreements, or establishing a trust, these measures help ensure that your children receive the inheritance as originally intended.

Hopefully, after reading this short summary, you feel more confident about taking action to safeguard your inheritance in the instance of divorce.

If you would like to find out more about this topic and how we can support you in your legal services, please contact the team

(*Please note – we recommend you seek guidance for your own personal circumstances as this information does not constitute financial or legal advice)

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