Protecting Inheritance On Divorce – Family and Matrimonial

The starting point on divorce is that the assets acquired
during the marriage fall into the ‘matrimonial pot’ and
will be divided equally between the parties. This is called the
sharing principle.

However, in certain circumstances an inheritance will be a
relevant contribution and a good reason to depart from an equal
division.

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 attribute to the existence of
non-matrimonial property can depend on the way the parties have
organised their financial affairs 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.

Strategies to protect inheritance

• A pre or post nuptial agreement can record what assets are
  matrimonial or non-matrimonial and whether the sharing principle
  will apply on divorce.




• Do not intermingle your inheritance. Keep it separate and apart
  and do not use it for the benefit of both parties to the
  marriage.




• 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.




• 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.




• 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.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.