You may be in a position where you are thinking about how to protect inheritance on divorce. The starting point on divorce is for the assets acquired during the marriage to be categorised as ‘matrimonial assets’ and to be divided equally between the parties. This is called the sharing principle. However, in certain circumstances an inheritance will be a relevant contribution and provide a good reason to depart from the sharing principle.  

Matrimonial and non-matrimonial assets 

The court will distinguish between matrimonial (assets acquired during the marriage through the joint efforts of the parties) and non-matrimonial assets (those acquired prior to marriage, post separation or received through an inheritance). In White v White [2000] UKHK 54 it was recognised that a party should be allowed to keep his non-matrimonial property, brought into the marriage or inherited or gifted to him during the marriage if the other party’s financial needs could be met without recourse to the non-matrimonial assets. 

The weight the court attributes to the existence of non-matrimonial property can depend on the way the parties have organised their financial affairs during the marriage and the time that has elapsed since the property was acquired. The longer the marriage the more likely non-matrimonial property will become merged and entangled with matrimonial property. For example, if an inheritance has been used to renovate the matrimonial home, an argument that this investment should be returned because the source was an inheritance may not get far, especially if the property is owned in joint names.

Top tips to protect inheritance on divorce

If you’re looking to protect inheritance on divorce, you may want to consider these top tips;

  1. A pre or post nuptial agreement can record what assets are matrimonial or non-matrimonial and whether the sharing principle will apply on divorce.
  2. Do not intermingle your inheritance. Keep it separate and apart and do not use it for the benefit of both parties to the marriage. 
  3. Keep records. Maintain records to demonstrate the original source of the funds and to demonstrate that it has not been intermingled with the family finances. 
  4. Let your financial advisor know. Your financial advisor may otherwise advise you to put assets in your joint names or even transfer them to the sole name of your spouse. 
  5. Take legal advice. A family lawyer will be able to advise you on the likely approach of the court to your inheritance and help you reach a fair outcome. 

Protect inheritance on divorce with Watson Morris

At Watson Morris, we specialise in family law – this means we can help with protecting inheritance on divorce, if this is something you are looking for support on then contact us today.

Written by Caroline Watson

October 13, 2022

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