Below we break down key factors that may be relevant in determining how your inheritance is distributed post separation.
When dividing a property pool, the Court follows a four (4) step approach. This process is relevant to determining how your inheritance may impact on your property division. The four (4) step approach is as follows:
- What is the property pool available for division?
- What contributions has either person made to the property pool?
- What person has the greater future needs?
- Determine whether the proposed division of property is just and equitable.
If you have received any form of inheritance that remains current at the time of your property settlement, this will form part of the total pool available for division. This could be reflected as cash in a bank account, a property or some other physical asset. If the inheritance value still exists at the time of settlement, it will be shown as an asset on the Balance Sheet.
An inheritance reflects a financial contribution, referred to under “Step 2” of the four (4) step approach. Whilst the total value of the inheritance received will be relevant to the asset division, you will not necessarily receive the exact value of your inheritance to the exclusion of your ex-spouse. Other factors will be relevant to the overall divisions such as whether your ex-spouse also made any significant financial contributions, when the inheritance was received, the parenting and non-financial contributions of each party, how the inheritance was spent and the length of the relationship.
Step 3 of the four (4) step approach, being future needs, may also influence whether you retain your full inheritance at the conclusion of your property settlement. This is because the Court needs to consider whether one or both parties may have additional needs that may mitigate their ability to work in the future. This may include any medical issues or caring for young children. The Court will consider the total asset pool available for division and the individual circumstances of each party when determining a property settlement. The Court will not necessarily exclude your inheritance from being accessible or divisible to your ex-spouse.
