Are inheritance assets included as part of divorce finances?

Under English law, inheritance is generally considered a non-matrimonial asset in divorce proceedings and typically not included in the marital pot to be divided between spouses. There are circumstances in which inherited assets might be included though as we detail below.

The best way to ensure clarity about intentions relating to inherited assets is to discuss the issue openly with your fiance before you get married and record any agreed position in a prenuptial agreement. The best form of practical protection is keeping inherited funds separate from marital assets to maintain their non-matrimonial status.

When might inheritance already received be part of the divorce asset pool?

The 3 most common scenarios are :-

• If  you use inherited funds to significantly improve a marital asset (like renovating the family home), the increased value due to the inheritance might be considered during the division of assets.

• If you mix inherited funds with marital assets, such as depositing them into a joint bank account, it can blur the lines and potentially affect how those assets are divided.  It's best to keep inherited funds separate to maintain their non-matrimonial status.

• Where there are not enough assets or earning capacity to split between the parties especially to ensure that the needs of any children are met

The 3^rd scenario above is the most troublesome and might well be the subject of necessary negotiations to try and reach a financial settlement. This is because the needs of children will always be paramount if a court has to ultimately rule on finances and the court is not legally bound to ignore any assets.

Reaching a reasonable settlement where assets or earning capacity are limited may mean accepting that some proportion of an inheritance is included in the pot of assets

When might future inheritance be included in divorce assets?

In most cases, your future inheritance is not considered in a divorce settlement.  There are some rare exceptions, such as if the inheritance is highly likely to occur soon and substantially impact your financial situation.

Future inheritance is also rarely considered by the courts unless it's highly likely and will significantly impact finances.

We can help

If you need advice on any aspect of divorce, divorce finances or you are already in dispute with your spouse about financial issues on divorce, please do get in contact. We have a team of very experienced family lawyers to give you the best advice.