Is my inheritance protected on my divorce? « McAlister Family Law


Is my inheritance protected on my divorce?

Anna Rooney


As a family lawyer, I am often asked: "can I protect my inheritance?" An inheritance can take many forms, such as personal belongings that hold dear memories, or monies with the hope of easing the financial strain. On divorce an inheritance is  usually included within the matrimonial pot available for division. However,there are circumstances in which it is considered appropriate to “ring fence” an inheritance before the matrimonial assets are divided.

Firstly, when was the inheritance received? If the inheritance was received during the marriage and was enjoyed either in part or full by the couple, then it is possible that the court may view this inheritance as a matrimonial asset, as it has benefited the family up until the point of separation. If so, the court has the power to include the inheritance in the matrimonial pot and it will be available for division between the parties. If the inheritance was received during the marriage, but was kept separate and not “intermingled” with the matrimonial assets, for example a sum of money which has always been kept in an account and not used to benefit the couple, this may be ring fenced and not considered to be part of the matrimonial pot for distribution.  

If the inheritance was received after separation and thus not enjoyed by the parties, more specifically, not enjoyed by the soon-to-be-ex-spouse, then there is a strong argument that the inheritance should be ring-fenced and therefore not included within the matrimonial pot for division; this would be the starting point. However, the court will only consider ring fencing inherited assets if the assets within the matrimonial pot are sufficient to meet the needs of each party.

When we are either trying to reach a settlement out of court, or when attending court and asking a judge to order a financial settlement, the primary objective is to ensure the needs of each party (and any children) are met. The starting point for division of the matrimonial pot is 50:50, yet if the needs of one party are greater than the other, then the court has the power to depart from this 50:50 split.

What, in this context, is need? A question that can often be personal to each and every one of us; we all have different needs and priorities, therefore surely a need is subjective. But in the eyes of the court, needs fall in to the following categories:

  • income needs – the court will look at how much income each party is receiving, and determine if each party is maximising their earning capacity; if not, they will be expected to do so. Together with this, the court will consider the ages of the parties and their employment backgrounds. If one party has contributed to the family by raising the children and/or keeping the household running smoothly while the other went out to work, the court will certainly consider the contribution that this spouse has played in raising the family, together with considering the practicalities of this spouse obtaining employment and the realistic salary they will receive if they have been out of work for a considerable amount of time
  • capital needs – the court must consider the capital needs of each party; this includes a reasonable and suitable property for each party to reside in and if a car is required for travel etc. The court will review the borrowing capacity of each party to determine what is feasible for each to afford. Upon assessing the capital needs, if there are children of the marriage, further requirements must be considered with the properties. For example, both parents need to have appropriate sized properties to house children for when they visit and stay, together with determining if the property/properties need be on the school route, if the assets are sufficient to allow this
  • income upon retirement (if close to, or at retirement age) – this is usually covered by pensions of the parties. It is hoped that in this day in age, each party has their own pension and is adding to this on a regular basis to secure their income upon retirement. However, this is not always the case and often, during a marriage, the parties will agree to pay in to one pension only, with the intention of sharing and enjoying this pension pot upon retirement. Meanwhile the other party will not contribute to their pension and simply use those funds to meet their every-day needs or enjoy other times as a family, such as holidays. Therefore, the court has to consider the income needs of each party once they retire. If there is an imbalance, the court can make a pension sharing order, giving some of one spouse’s pension interests to the other spouse, so that they both have sufficient income upon retirement.

If the needs outlined above can be met by the assets that are within the matrimonial pot, without including the inherited assets, then there is a stronger argument that the inheritance can and should be ring fenced. 

Secondly, I am also frequently asked: "is my future inheritance at risk?" Again, another tricky question which too does not have a definitive answer. If the inheritance will be received shortly due to a recent death, then it is possible that the court may be persuaded to award more of the matrimonial pot to one party on the understanding that the other party is expected to receive an inheritance, which will be considered by the court as a financial resource to assist with their needs. It is possible for a court to adjourn proceedings until the inheritance is received; however this tends to be when the inheritance is expected to be a substantial amount which will impact the division of matrimonial assets greatly.

If you are yet to receive your inheritance and your loved ones are fit and healthy, the court should not consider your inheritance when making an order for division of assets, as it is unclear and unknown when you will receive it, how much you will receive and if there are any caveats attached to it.

Inheritance to many of us is personal, and should be managed delicately.


If you are affected by any of the issues outlined above, please do get in touch with one of our specialist family lawyers today. We're here to help you.

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