Is inheritance included in divorce?

We often get asked questions relating to divorce and inheritance, such as ‘What happens if I inherit assets when I am going through a divorce or if I am already divorced? Is my ex entitled to any of it?’.

The topic of inheritance and divorce can be quite complex, and we shall try to simplify inheritance on divorce in this blog, as understandably this topic is very important to many people.

Inheritance refers to assets such as property, savings and belongings (essentially anything representing monetary value), which constitute a person’s estate, being ‘left’ to a group or sole individual, once they are deceased.

Any debt accrued by the deceased would be recoverable from their estate and is therefore not ‘heritable’. We have outlined the divorce process below, and where a financial order and inheritance in divorce proceedings are relevant.

Note: All references to divorce below, apply equally to dissolution

The divorce process:

We’ve written a full guide on the divorce process which will provide you with more information; here is an overview below:

• Step one: You will need to submit either a joint or sole application for divorce. The court will check this and if satisfied with the information you have provided, will issue your divorce application. Once issued, the mandatory 20-week reflection period begins and if you’ve applied solely, a copy of your divorce application is sent to your ex.
• Step two: You must wait for the 20-week reflection period to elapse before progressing further. This period has been built into the divorce process to enable couples to adjust to the news and to make any financial or children arrangements.
• Step three: Once the 20-week reflection period has elapsed, and if you have applied jointly or if your ex has responded (for sole applications), you’ll be able to apply for conditional order, which is the middle stage of the divorce process.
• The court reviews your application and if satisfied that you can get divorced in England & Wales and all the information you have provided is correct, then the court will provide your 'certificate of entitlement'
• Step four: Once this date has elapsed, providing the couple has agreed on their financial claims they can submit a consent order, however, this is optional.
• Step five: After the six-week period has elapsed after the conditional order, you can apply for your final order. This was formerly known as the decree absolute and is the final stage of the process. Once granted (this takes one or two days), you will receive a final order certificate. It’s recommended to wait until the consent order has been sealed prior to this.

What happens to an inheritance when you divorce, will depend on if you have chosen to submit a consent order or apply for a financial remedy order at step four of the divorce process. We will outline the implications for both below.

Is future inheritance considered in a divorce settlement?

The starting point of any financial agreement is that the couple has to provide full disclosure of all their assets.

This means any inheritance received, or likely to be received in the foreseeable future, will need to be disclosed and discussed.

If the person who has received or is likely to receive an inheritance after divorce and wants it excluded, then this is referred to as 'ring-fencing'.

Ring-fencing:

When a Judge reviews your consent order, they take into consideration multiple factors including children’s welfare, length of marriage and contributions made. You can have a look at some other factors a Judge may consider when reviewing your financial settlement via the amicable agreement checker.

Ring-fencing refers to asking the court to keep the inherited assets out of the ‘matrimonial pot’. There is no guarantee that the court will do this, as this is largely dependent on the needs of both people and their children. If their needs can be met without taking into consideration the inheritance monies, then the court could ring-fence and not include the inheritance assets. Another consideration is the time when the inheritance was received i.e. prior to the marriage or after separation.

Inheritance received prior to the marriage:

If you received an inheritance prior to your marriage, and you start divorce proceedings, this would normally still be included in your matrimonial assets, unless there’s a clear reason why this should be ring-fenced. For example, if you were married for a very short period and have no children and/ or if outlined in a prenuptial agreement. Again, it is dependent on the needs of the couple and their children, if any, being met.

Will a prenuptial agreement protect my inheritance?

In theory, agreements outlined in a prenuptial agreement such as ring-fencing any inheritance should serve as persuasive evidence to the court should a couple separate and submit a consent order or apply for a financial remedy order. A prenuptial agreement is not legally binding, as this would have to go through the court and be made so through an order.

What happens if I don’t submit a consent order?

If you don’t submit a consent order or apply for a financial remedy order, you will still be financially tied together, regardless of whether your divorce is finalised. A consent order includes a clean-break clause that ends future claims. Therefore, without one, your ex can still claim from you in the future, until they remarry or die.

Inheritance received during the marriage:

If you receive an inheritance during your marriage, this is included in your ‘matrimonial pot’ and is therefore included in your financial settlement, unless there is a justifiable reason why this shouldn’t be included. We can help you with this, if you and your ex are confused or need any help with any element, you can book a Joint Advice Consultation with a Divorce Specialist.

Inheritance received after divorce:

If you’re concerned about your inheritance and divorce proceedings have ended (i.e. you have your final order), consider obtaining a consent order if you haven’t already. Your ex can still claim from you post-divorce if you haven’t got a financial order preventing the possibility of future claims.

This is why having a consent order is so important for couples wishing to protect themselves in the future. In the same way that if you were to win the lottery and you didn’t have a financial order ending future claims, your ex would still be able to make a claim on this, they would also be able to claim future inheritance even if you inherited it after your divorce was finalised. You can have a consent order drafted containing a clean-break clause, even if you haven’t currently got any financial arrangements to make (property, pension, savings etc.). It’s often recommended if you may inherit in the future and want to protect this from your ex-spouse.

Children’s inheritance post-divorce:

You can outline arrangements for your children when you revise your will, based on your financial settlement. You should consider that your ex may wish to remarry and may go on to have additional children in the future.

FAQs

What happens to inherited property in a divorce?

This will depend on multiple factors, such as when the inheritance was received, and the needs of the couple and their children, however, will likely be included as part of your matrimonial pot and then agreed to be “ringfenced” as part of your divorce financial settlement.

Is inheritance part of the divorce settlement?

Usually, unless there are reasons why it should be excluded, or if you have a financial order ending future claims or ring-fencing the inheritance.

How to protect your children's inheritance from divorce UK?

In England and Wales, a financial order and updating your will should help protect your children’s future inheritance.