Inheritances make up a complex and varied area of law. Whilst the Family Court has provided some general principles with respect to how the law is applied in this area, how it deals with inheritances in a marriage or de facto relationship will depend on the facts of the particular case. So, how are inheritances actually treated by the law? How are they assessed and divided in the event of separation?
Inheritances are treated as contributions made on behalf of a party to a marriage or de facto relationship. That means that in the event of a separation or divorce, any inheritances received are assessed as a part of the asset pool to be divided amongst the parties. Inheritances can form a significant part of the asset pool and in some cases the bulk of the asset pool. The weight given to any inheritance therefore will have a significant impact on the division of property.
The Court has a wide discretion when dealing with inheritances. The impact of the inheritance on the overall division of the property pool will depend on a number of factors including the following:
This is not an exhaustive list. As indicated every case is different and there may be other factors or a combination of these factors that may come into play. Few people realise that prospective inheritances are generally irrelevant to any property proceedings. What you may receive in the future from an inheritance is not taken into account except in rare circumstances. One such circumstance might be where the Testator – the person leaving the inheritance – has lost their ability to change their will through mental infirmity. However, even in this circumstance, certain conditions must be met.
What happens when an inheritance is received late in the relationship?
Generally speaking, if an inheritance comes very late in a relationship or marriage or after separation it will be treated very differently to the rest of the asset pool. In effect, if there are other assets to be divided it will largely be “quarantined”. Again, this is not a hard and fast rule and will depend on all of the circumstances of the case. If the inheritance is quarantined it will still be a significant factor in any division of assets. This is because it will be seen as a financial resource in the hands of the person who inherited. This may mean that that party receives a lesser percentage of the rest of the assets.
What happens when an inheritance is received early in the relationship?
An inheritance received earlier in the marriage may still be a factor in favour of the party who inherited it but the weight given to that factor will depend on the length of the relationship and all of the other contributions that may or may not have been made by both parties. Like most aspects of Family Law this is a “grey” area. It is complex and will always depend on the particular circumstances of the case.
We at Freeman Family Law have a vast experience in financial cases and the impact of inheritances. When an inheritance is involved, advice and representation from an experienced expert is required. If any of these issues resonate with you don’t hesitate to contact us for an expert assessment of your case.
Freeman Family Law has been assisting clients for over 30 years on matters involving divorce or separation, complex financial and property issues, as well as advice on parenting and wills & estates. Book an appointment with an Accredited Family Law Specialist online or at one of our offices in Yarraville, South Melbourne, Caroline Springs, Essendon or Mornington.Enquire Now
Coronavirus (COVID19) Outbreak
Parenting Orders & COVID 19
Preparing for your first online family law consultation
The Bank of Mum and Dad: What to consider when helping children buy property
Family Law 101: What to do when you receive a letter from a family lawyer
The Aussie ‘Prenup’: Understanding Binding Financial Agreements Duri ...
What happens when couples kiss and makeup…and separate again?
Family Law 101: Understanding Family Reports
Report: 42 per cent of people have experienced a negative change in their relati ...
We’re Open For Business | A Freeman Family Law Stage Four Lockdown Update
Four reasons why not having a Will causes more heartbreak for your loved ones
Protecting children from “Unacceptable Risk”
Tick, tock: Time limits and post-divorce/post-separation applications for proper ...
Gut feeling and the Family Court
Christmas, Separation and Kids: Handling Holiday Arrangements
Time is Money: Why Mediation could be a better solution to your Family Court mat ...
What is Collaborative Law?
The Merging of the Family Law Courts – What Has Changed?
Relationship Property Settlements for Business Owners – What You Need to K ...
Family Law Property Settlement for Business Owners: What You Need To Know.
Accredited Specialists Freeman Family Law announce new office in Mornington Peni ...
Can a judge order that a child be vaccinated against one parent’s wishes?
Can a parent get a child vaccinated if the other parent disagrees?
To vaccinate or not to vaccinate for young children – what if parents can& ...
Accredited Specialists Freeman Family Law open new office in Dromana
The Brady Bunch and Mutual Wills
“Justice” in Family Law
When Experts Get It Wrong