Your web browser is out of date.

Update your browser for better security, speed and to get the best experience on this website.

Update your browser
Insight | For Individuals

Navigating Inherited Assets in Divorce Settlements: What you need to know

Divorce youung couple ignore 1761235874

When considering financial settlements following a divorce (or dissolution of a Civil Partnership), a party of the relationship may wish to exclude certain inherited assets from the matrimonial pot.

The courts have indicated that there are circumstances when inherited assets may be treated differently from other matrimonial property; however, there is no prescribed formula when dealing with inherited assets and care should be taken when considering inherited assets following a relationship breakdown.

In White v White, when considering the available assets to be divided in the matrimonial pot, the Court developed the concepts of matrimonial and non-matrimonial property. It would seem to follow that all inherited assets should be classified as non-matrimonial property as they are not fruits of the partnership and should therefore automatically be excluded from the matrimonial pot. However, before excluding an asset from the matrimonial pot the court’s first, and main consideration will be the parties’ needs. The origin of the inherited property will carry little (or no) weight in many ordinary cases where a spouse’s (and any children’s) financial needs cannot be met without recourse to the inherited assets; in these circumstances the court may distribute the inherited asset like any other financial resource.

Divorce seperation 1419698681
Divorce wedding rings contract generic 1043592691

In situations where both parties’ needs can be met from the matrimonial property alone, an argument can be made that certain inherited assets should be ring fenced. Despite inherited assets being an unmatched contribution from one party to the marriage, the court will not automatically exclude inherited assets from the matrimonial pot in these circumstances. The court will consider a range of factors when determining the issue including (amongst others):

  • The moment in time in the relationship when the asset was inherited – if an asset was acquired prior to the marriage (and from a source wholly external to the marriage) it is more likely that the asset shall be classified as non-matrimonial property; meanwhile if an asset was acquired during the marriage, it is more likely that the property will be considered to be matrimonial.
  • The length of the marriage - in short marriages, the parties’ contributions (and source of the contribution) is more likely to be relevant when determining financial settlements; conversely, in longer relationships the parties’ finances will inevitably become more intertwined and the court may consider that the source of an asset will be less relevant and may in fact diminish over time.
  • The nature of the inheritance - a valuable heirloom is more likely to be separated from the matrimonial pot than a portfolio of stocks and shares. The reason being, that an heirloom is less susceptible to mingling, meanwhile a family may dip in and out of a family portfolio or trust when cash is needed.
  • The parties’ intentions in relation to the inherited asset throughout the course of the relationship and specifically, whether the asset has become intermingled with the parties’ finances.

No matter what steps are taken, inherited wealth can never be completely protected from a spouse in the event of divorce. Nevertheless, steps can be taken throughout the relationship to better protect the beneficiary’s position in the event of a relationship breakdown. Such steps could include, maintaining the distinct and separate origin of the wealth; taking well rounded legal advice; and entering into a pre-nuptial or post-nuptial agreement.

1 White v White [2000] 2 FLR 981
2 Robson v Robson [2010] EWCA Civ 1171


Contact Us Let's have a chat


Meet our Family Law Legal Team

Our family solicitors in milton keynes have in-depth expertise across a wide range of legal issues. We will deal sensitively with your case and ensure you have the support you need.
Give us a call 01908 662277

Let's discuss your situation…

Complete the form below and we'll call you back to discuss navigating inherited assets in divorce settlements: what you need to know and understand your situation and requirements.

Tell us how we can help you or a short breakdown of your current situation and requirements.
Note: Any information you send us via this form will only be used for the purposes of processing your enquiry. It will not be used for marketing purposes or sold to third parties. View our privacy policy.

Get to know us wih a call back, at a time that suits you. Let us offer some guidance and direction to start your journey with Heald Solicitors today.