Can I keep my inherited assets out of the relationship asset pool?
The common position in relation to inheritances is that an inheritance received during or prior to divorce will be included into the property pool. This is the case even if the inheritance is received after separation.
In some circumstances however inherited assets can be treated differently to other assets in the relationship asset pool.
Monies or other assets inherited often hold sentimental significance to the recipient. For example, the assets many be the result of long term savings and sacrifice by parents for the benefit of their child.
On the breakdown of a relationship, many factors are taken into account at law when determining how the assets of the relationship are divided. Just as every relationship is different, every property settlement is different.
Sometimes inherited assets can be treated differently to the other assets of the relationship.
The treatment of the inheritance is affected by factors including:
- The length of the relationship;
- The timing of the inheritance in the relationship;
- The size of the inheritance, including the size relative to the other assets in the pool;
- The relationship of the parties to the benefactor; and
- Whether the inherited asset has been spent or sold and, if yes, what was purchased or how were the sale proceeds applied.
For example if the inheritance is received 1 year prior to separation of a 20year relationship the court may likely treat that asset separately. If however the inheritance was received early in the relationship then the court will likely treat the inheritance the same as all the other assets but will possibly make an adjustment in terms of financial contributions made to the relationship on your behalf.