What happens to your inheritance when you separate?
You’ve worked hard to invest your inheritance wisely, but now you’re left wondering if your ex-partner is entitled to a portion of it.
We’re here to help you understand and navigate this complex issue to better safeguard your assets.
Is my ex partner entitled to half of my inheritance?
The question of whether your ex-partner is entitled to a portion of your inheritance is a common concern during a separation. Generally, inheritance is not automatically considered a protected asset in family law matters unless it has been entirely preserved, such as being kept in a separate term deposit account since receiving it. Even in that case it would ordinarily form part of the property pool for adjustment between a couple.
An inheritance is typically treated as your financial contribution, which may be taken into account when determining a fair division of property. However, various factors come into play, including the amount of the inheritance, how it was used, and the overall financial circumstances of each party.
The wishes of the Testator are also relevant; whether they intended for both of you to benefit from the inheritance or only one. If the inheritance is recent and has not been substantially impacted or contributed to by your ex-partner, it may carry more weight in the division of assets.
Each case is unique, so it’s important to consult with a lawyer who can provide tailored advice based on your specific circumstances.
What happens to your inheritance after a separation
When it comes to the fate of your inheritance after a separation, several factors come into play. In general, unless your inheritance has been preserved in a bank account, it is unlikely to be included in the overall property for adjustment between you and your ex-partner. Instead, it will be considered as a financial contribution by you, of some kind, depending on how it was utilised.
In cases where parties bring in separate property that the other party has not contributed to during the relationship, arguments can be made to exclude that property from the joint property pool, although this is rare. If your inheritance has been preserved in a bank account and still exists today, it will likely be viewed as part of the relationship assets. However, if you’ve used your inheritance to buy property or support your children’s education, it will be considered a contribution made by you towards the relationship’s property, homemaking, and/or parenting responsibilities.
Taking it to court
When it comes to resolving the division of assets involving an inheritance during a separation, taking it to court can sometimes be necessary. In such cases, the court considers various factors to determine the extent to which your ex-partner may be entitled to a share of an existing inheritance. These include who received the inheritance, the timing of its receipt, the intentions of the deceased as expressed in their will or other relevant documents, the nature of the relationship with the deceased, the value of the inheritance, how it was used, and how much time has passed since its receipt. The court examines these elements to make a fair and equitable decision regarding the division of assets.
It can be helpful to seek professional legal advice to understand how these factors apply to your circumstances and to navigate the court process effectively.
Protect your inheritance in a divorce settlement
There are measures you can take to protect your assets.
One effective strategy is to enter into a Binding Financial Agreement (sometimes referred to as a “pre-nup” – regardless of whether or not you are a de facto or married spouse) that clearly outlines the division of property, including the status of your inheritance. These agreements provide a legal framework for protecting your assets in the event of a separation.
You can enter into a Binding Financial Agreement at any time before and during the relationship that designates your inheritance as separate property. This can protect your inheritance.
Seek guidance from experienced divorce or family law lawyers to navigate the legal complexities and ensure that your inheritance is protected. Their expertise can help you make informed decisions throughout the process.
FAQs
Can my ex claim part of my inheritance?
In Australia, whether your ex-partner can claim a part of your inheritance in family law will depend on the specific circumstances of your case.
Under the Family Law Act 1975 (Cth), the court has the power to divide all property between separated spouses, including assets acquired before, during, and after the relationship. The court will consider a range of factors in determining how to divide property between separated spouses, including the financial and non-financial contributions of each party to the relationship, the future needs of each party, and the overall justice and equity of the proposed division.
Inheritance received by one party after separation is generally treated as a financial contribution by that party, which may be taken into account in determining a fair division of property. However, whether your ex-partner can claim a share of your inheritance will depend on the specific circumstances of your case, such as the amount of the inheritance, whether it still exists, and the overall financial circumstances of each party.
Is my partner entitled to half my inheritance?
In Australia, whether your partner is entitled to half of your inheritance will depend on a number of factors, including the timing of the inheritance and how it has been dealt with.
If you receive an inheritance before entering into a relationship, and you keep the inheritance separate from the joint assets of the relationship and do not use it for the benefit of the relationship, it may be considered your separate property and not subject to division in the event of a separation. It all depends on the circumstances of your individual case.
However, if you receive an inheritance during the course of the relationship, or if you commingle the inheritance with joint assets, any remainder left may be considered part of the asset pool subject to division in the event of a separation. In that case, the court would consider a range of factors in determining how to divide the property, including the financial and non-financial contributions of each party to the relationship, the future needs of each party, and the overall justice and equity of the proposed division.
In any case, there is no general half-half rule. It will depend upon the individual circumstances of your case. But if you received an inheritance today, for example, you don’t have to give half of it to your partner. You can keep it separate.
If I am separated, and I get an inheritance in the future, is my ex entitled to a share of that inheritance?
If you are separated at the time you receive an inheritance, whether your ex-partner is entitled to a share of that inheritance will depend on a number of factors, including the timing of the inheritance and how it has been dealt with.
If you receive the inheritance after separation, it is not always considered joint property subject to division. However, if you receive the inheritance during the course of the relationship, or if you commingle the inheritance with joint assets, and some of it is left, it may be considered part of the asset pool subject to division in the event of a separation.
If I am divorced, can my ex get a share of my inheritance if I receive one in the future?
If you are divorced at the time you receive an inheritance, generally your ex-spouse would not be entitled to a share of that inheritance. Once a divorce is final, property settlement orders are usually made prior to the divorce or within 12 months of the divorce, and the property settlement is final. This means that each party is entitled to their own assets, and any future assets received would not be subject to division between the parties.
However, there are some limited circumstances where a property settlement may be re-opened or varied, such as if there was fraud, undue influence, or a significant change in circumstances that affects the original settlement.
