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 far more nuanced.
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.
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, on the other hand, argued that their agreement to keep finances separate meant she had no entitlement beyond what she had personally contributed.
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 case highlights how financial separation during a relationship does not necessarily prevent a court from redistributing assets if fairness requires it.
Case Study: Business Growth and Indirect Contributions
In Selwood & Selwood (No 2) [2024] FedCFamC1F 700, the mother had established a business that significantly increased in value after separation. The father sought a larger share of the asset pool based on indirect contributions. The court ruled in his favour, recognising his role in supporting the household and raising children during the relationship.
The Impact of Timing on Inheritance Treatment
Inheritance Received After Separation
Timing is critical when it comes to inheritances in family law. If an inheritance is received after separation, the recipient may have a stronger case for excluding it from the asset pool.
In Fagan & Fagan (No 2) [2024] FedCFamC1F 791, the husband received an inheritance after separation and argued it should be quarantined. However, the court awarded additional property distribution to the wife due to her limited income and primary caregiving responsibilities. This demonstrates that even post-separation inheritances can influence property settlements.
Inheritance Used for Joint Expenses
If an inheritance is received during the relationship and used for joint expenses—such as paying off a mortgage, funding renovations, or covering living costs—it is more likely to be treated as part of the divisible asset pool.
In Pao & Moy (No 2) [2024] FedCFamC1F 643, the wife argued that her inheritance should be excluded. However, since part of it had been used for marital expenses, the court factored it into the settlement.
How to Protect Your Inheritance in a Property Settlement
If you receive an inheritance during or after a relationship, there are steps you can take to protect it:
Set up a financial agreement before or during the relationship to clarify whether an inheritance will be excluded from property division.
Keep the inheritance in a separate account and avoid using it for joint expenses.
Maintain clear records of how the inheritance was used to strengthen a claim for exclusion in family law proceedings.
Why Legal Advice is Crucial
There is no one-size-fits-all answer to how an inheritance will be treated in a property settlement. Courts take a holistic approach, considering contributions made by both parties and the future financial needs of each person.
At Jameson Law, we understand the importance of protecting your financial future. If you have received or expect to receive an inheritance and are going through a separation, our experienced family law team can guide you through your options and help ensure you receive a fair outcome.
Speak to an Expert Family Lawyer Today
Need advice on inheritance and divorce? Contact Jameson Law for a confidential consultation. Our team of family law specialists will help you protect your assets and navigate the legal complexities of property settlements.
