Can I protect my inheritance when going through a divorce?
Within the family law team at GA, we are often asked about the protection, or “ringfencing” of inherited wealth. This can be an important, and often substantial, issue when dealing with finances during divorce.
The option to protect a future inheritance or recently inherited wealth is often overlooked during an otherwise happy marriage. However, as a couple, you could proactively discuss any potential and likely inheritance and agree to ringfence such financial resources “just in case”.
In such circumstances, there would need to be a full and frank disclosure of all financial resources and both parties would need to obtain independent legal advice. After that, a post nuptial agreement could be prepared, signed and tucked away.
Whilst future success is not guaranteed, if the couple reaches a financial settlement whereby agreeing to abide by the terms of the post-nuptial agreement, then an order of the court ratifying the settlement can be applied for. It is important to remember that the judge must still undertake “due diligence” in deciding whether or not to approve the proposed order, but it may be better to have had the discussion and reached an agreement before tensions run high at the end of a marriage.
Even if it is impossible to reach an agreement and judicial intervention is needed, a post-nuptial agreement may still be considered by a judge when deciding how best to share the money in the event of a future dispute. If correctly drafted and detailed in the agreement, then this could therefore help to protect your inheritance when going through a divorce.
If no such post-nuptial agreement exists (or pre-nuptial agreement; which is becoming increasingly common, especially in regard to second marriages) it is still possible to fully consider what constitutes matrimonial and non-matrimonial wealth and, where appropriate, argue that inherited wealth should be ringfenced for the original beneficiary and thus fall into the latter category.
Second to the consideration of the welfare of any minor children, “need” is the courts’ main consideration when determining financial disputes. If the parties’ needs cannot be met without recourse to the inherited wealth then it will be utilised by the court.
Much will depend on when the inheritance was received during the course of the marriage, what is left, whether the money became intermingled with other matrimonial money and what the bespoke family dynamics are.
Thus, in the unfortunate event of a marriage breakdown, money inherited from one side being made available for sharing with the other spouse will depend on a myriad of issues, but it is most certainly worth discussing this with your family solicitor at an early stage.
Parents who suspect they, or their children, maybe in marital difficulty at some future point, can also take inheritance advice from the specialists in our wills, trusts and probate department to consider what options may be available to them to preserve family money from being at risk of being diluted by the divorce courts.
So, when asked “Can I protect my inheritance when going through a divorce?” the answer is unfortunately not straightforward. However, as this article shows, there are some steps you can take to assist with these wishes.
If you are considering a prenuptial agreement, read our recent article about whether they are legally binding in the UK.
If you are considering a divorce or would like to discuss a pre or post-nuptial agreement then our family law team is experienced and ready to help. You can email me directly via michelle.grove@GAsolicitors.com or call 01752 203500.
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