Will My Ex Get a Share of My Inheritance? Family Law Explained
Understanding How Inheritances Are Treated in Family Law
When a relationship breaks down, dividing property can be complex, especially when one party receives an inheritance. Many people assume that an inheritance is automatically excluded from the asset pool in family law proceedings, but the reality is more nuanced. See our overview of family law in Sydney and a deeper guide to family law in NSW.
Whether an inheritance forms part of the divisible assets depends on several factors, including when it was received, whether it was used for joint expenses, and the broader contributions of each party. For the court’s power to adjust property, review section 79 property settlement principles.
Key Family Law Cases on Inheritance
Case Study: Contributions and Financial Agreements
In Henson & Marlin (No 4) [2024] FedCFamC1F 713, a wife sought a 40% share of the total net asset pool, arguing that her financial and non-financial contributions warranted a larger portion. The husband argued that their agreement to keep finances separate meant she had no entitlement beyond what she had personally contributed. For context on keeping assets separate and agreements, see binding financial agreements and our article on inheritance and relationship breakdown.
The court ultimately found it just and equitable to divide the property in her favour, considering her ongoing responsibilities as the primary caregiver for their children. This shows that financial separation during a relationship does not automatically prevent redistribution if fairness requires it.
Case Study: Business Growth and Indirect Contributions
In Selwood & Selwood (No 2) [2024] FedCFamC1F 700, the mother’s business increased in value after separation. The father sought a larger share of the pool based on indirect contributions, which the court recognised. For practical property tips, see property settlement disputes and understanding property and financial settlements. You can also search recent FCFCOA judgments or browse AustLII.
The Impact of Timing on Inheritance Treatment
Inheritance Received After Separation
Timing is critical. If an inheritance is received after separation, the recipient may have a stronger case for excluding it from the pool, but needs still matter. In Fagan & Fagan (No 2) [2024] FedCFamC1F 791, the husband received an inheritance after separation and argued it should be quarantined. The court awarded additional property distribution to the wife due to her limited income and primary caregiving responsibilities. Read our explainer on how much you may get in a settlement.
Inheritance Used for Joint Expenses
If an inheritance is received during the relationship and used for joint expenses, such as paying off a mortgage, renovations or living costs, it is more likely to be treated as part of the divisible pool. In Pao & Moy (No 2) [2024] FedCFamC1F 643, the wife’s inheritance was factored in because part was used for marital expenses. For process and forms, see family law forms.
How to Protect Your Inheritance in a Property Settlement
Set up a financial agreement before or during the relationship to clarify whether an inheritance will be excluded from division. Start with our guide to financial agreements and section 90C requirements.
Keep the inheritance in a separate account and avoid using it for joint expenses where possible.
Maintain clear records of how the inheritance was used to support exclusion arguments if needed.
Why Legal Advice is Crucial
There is no single answer to how an inheritance will be treated. Courts take a holistic approach, considering contributions by both parties and future needs. If you need tailored guidance, speak with our family law team or call (02) 8806 0866.
Speak to an Expert Family Lawyer Today
Need advice on inheritance and divorce. Contact Jameson Law for a confidential consultation. Our specialists can help you protect your assets and navigate the legal complexities of property settlements.
