Articles by Marr Family Lawyers Wollongong to assist you in obtaining useful information and support services in respect to your family law matter.

How is an inheritance treated in a Family Law property settlement?

Family Law
property settlement
Relationship breakdown
family law court

In a marriage or relationship breakdown, it is not unusual for legal practitioners to find themselves guiding their client through complex disputes relating to the division of the asset pool. The treatment of inheritances largely depends upon the unique circumstances of each specific case. While it is not possible to predict the resolution of your situation, there are some points that will give you an indication of how the inheritance may be approached. Importantly, inheritances do not come within a “special protected” category of property. Therefore, they are not immune from inclusion in a property settlement claim.

Who received the inheritance? What were the intentions of the deceased?

Generally, one party is the recipient of an inheritance. In circumstances where a deceased person has left clear instructions which specify that an inheritance is intended for both parties, then it will likely be considered a shared asset. If the inheritance is intended to benefit one specific person only and provided that it has not been absorbed into any jointly owned assets, it could be argued it is to be excluded from the property pool available for division between the parties. Even so, the value of inheritance cannot be ignored when considering any future need adjustments of the parties, plus in consideration of the overall assessment of the outcome is just and equitable.

When was the inheritance received?

Although it is important to appreciate that there is no concrete rule about how inheritances are to be treated, the timing of the inheritance may influence the Court’s approach.

Before or in the early stages of the relationship

Inheritances received at this stage are likely to be regarded as initial direct financial contributions brought into the relationship or marriage by the person who received it.

During the relationship

It is a well-established principle that an inheritance received during a marriage is likely to be included in the property pool. If the inheritance was received toward the end of the relationship and before any formal property settlement, then it is also likely to be considered in the property pool. This does not necessarily equate to saying that your former spouse or partner is entitled to a portion of the inheritance. Rather, the Court will take into account this money contribution, balancing with all other matters relevant to determining a just and equitable property adjustment.

After the relationship

It is arguable that the opportunity to contribute the inheritance toward the relationship has diminished if it is received post separation. However the amount will still likely exist as an asset on any Balance Sheet when considering the value to be adjusted to each party.  


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