Inheritance: mine or ours?

According to recent research, a third of parents are concerned about leaving money and assets to their married children in their wills in case they get divorced. The assumption seemingly being that when a couple divorces they each walk away with half of the assets. Whilst this may be the outcome in some cases, it is by no means a preordained or guaranteed outcome.

When a marriage or registered civil partnership breaks down, the lawyers and the courts have to look at the individual circumstances of that particular case. When dealing with financial matters, the court’s objective is to achieve an outcome which is fair and reasonable in all the circumstances.

In order to consider whether a settlement is fair and reasonable, different factors are considered, such as: each person’s income and capital resources both now and in the foreseeable future; their respective ages; the duration of the marriage; their income and capital needs; their standard of living during the marriage; any disability either party may have; and contributions each party has made to the marriage.

An additional factor to be considered is whether an equal division of all the assets (including inheritances) would be fair. This is more likely to be the case in respect of a long marriage, but perhaps not for a short one.

An inheritance can form part of the assets to be taken into account, but this depends on what other assets are available and when the inheritance was received. If it was received at beginning of a long marriage, the ‘contribution’ may be watered down over the passage of time. If it is a recent inheritance, there may be more scope to argue that the person who received it should keep it. That said, an inheritance may not be excluded from the joint ‘matrimonial pot’ if there are very few other assets, to the extent that one or both parties’ needs cannot be met without the inheritance monies being added to the matrimonial pot.

To paint a picture, Mr and Mrs Wills are married with two children. Mrs Wills receives a significant inheritance which is used to purchase the family home. Unfortunately the marriage breaks down and Mrs Wills moves out and purchases a new property. Mr Wills remains living in the first home with the children. If there were no other assets, it would be unfair and unreasonable for Mrs Wills to receive her whole inheritance back as it would potentially render the children and Mr Wills homeless. This is merely an illustrative example, and most cases are not so clear cut. Full legal advice should be taken in respect of such matters.

Therefore, the answer to the question “is my inheritance mine or ours” depends on all the facts of the case.

Gemma Kemp, Legal Executive, Family Law, Woking

From wife’s inheritance of £57 million, is a £5 million award to the husband on divorce the right decision?

The Court of Appeal has just heard an interesting case regarding the division of an inheritance in divorce proceedings.

The case concerned a couple who had been married for 20 years. The wife had, prior to the marriage, inherited £57 million. Throughout the marriage, neither party had worked, choosing to be ‘stay at home’ parents and not pursue careers. The court in the first instance awarded the husband £5 million of the overall assets and the husband appealed this, saying that the award was ‘minimalist’.

The husband’s barrister argued that if the roles were reversed, and it was the husband who had inherited wealth of this magnitude, on divorce the wife would have been awarded a sum greater than £5 million. He also commented that it was more difficult to secure a husband a large settlement when the wealth belonged to the wife. The barrister added that this may be because generally speaking, husbands are perceived to be breadwinners, and to support the family financially and therefore, it has to be taken into account that the wife has not worked or built up a career or assets of her own.

Can it be argued that by virtue of not working and being a homemaker, the husband has sacrificed a career and therefore has suffered a disadvantage as a result of the marriage? It appeared to be a joint decision that neither the husband nor the wife would work, and that the wife’s inheritance would be used to support the family. If the husband does not receive a sum equal to what a wife would receive if the roles were reversed, would it be a matter of gender discrimination?

Inheritance on divorce is a grey area. If such inheritance was received prior to the marriage, it may be considered not to form part of the marital assets. However, in the case of a long marriage, pre-martial assets can often ‘merge’ with any assets accrued during the marriage and hence be included in the “matrimonial pot” to be divided on divorce.

In some cases, credit can be given to a spouse who has made a significant effort to increase the value of assets or the level of income during the marriage but in this case, the lawyers for the husband argued that the wife had made no “special contribution” to the assets of the marriage.

Do you think that this award accurately reflects what the husband in such a situation should receive? Or do you think that in a marriage as long as this, the assets should be divided equally and the husband compensated for his lack of career? We would like to know your views.

http://www.telegraph.co.uk/family/8354580/Divorced-husband-fights-for-more-of-ex-wifes-57-million-fortune.html


Sharon Powell and Anne Thomas, Hart Brown Family Department