It is not uncommon for a party to a marriage or de facto relationship to receive an inheritance following the death of a loved one. Should you separate, a property does not fall into a protected category merely because it is an inheritance rather its treatment will depend on the circumstances of your relationship.
The main consideration when deciding how to treat an inheritance is the timing of when it is received.
Inheritances that are received at the beginning or during the relationship may be treated as a financial contribution of the beneficiary spouse. This may then entitle them to an adjustment of the overall asset pool in their favour.
When an inheritance is received late in the relationship or following separation, the Court may decide to exclude it from the asset pool and determine that it is not available for distribution. However, it may consider the inheritance when deciding an appropriate adjustment for a spouse based on their future needs. If the asset pool is so small and the inheritance represents the majority of the property available for distribution, the Court may decide that, in order to achieve a just result, the other spouse is entitled to a portion of that property to compensate them for the contributions that they made during the relationship.
The Court may also consider cases where a party is a named beneficiary in a will for a person who is still alive. It is common for such an anticipated inheritance to be considered irrelevant in determining a property settlement following separation but that is not always the case. What will be important is determining whether the anticipated inheritance is likely to be received in the foreseeable future or not.
The treatment of an inheritance following separation is ultimately dependant on the individual circumstances and there are no strict rules to follow.
If you have any questions or would like to arrange a time to discuss your personal situation, you can contact us in Bathurst, Lithgow, and Oberon on 1800 650 656.
We’re here to help you and your family.
Lauren Ryan | Family Law Solicitor