Inheriting financial assets can be potentially problematic for the beneficiary, especially if it occurs during the process of separating. As a result, this inheritance may be factored into a divorce financial settlement.
So what do individuals need to know about the role that inheritances can play during a divorce? Here are a few of the most important issues to be aware of:
Does it matter when an inheritance was received?
One of the main factors in deciding the conditions of an estate will be when this was received. For example, if the inheritance was received early in the relationship, it will be classified as a contribution that the recipient has made towards the relationship's joint property.
If, on the other hand, the inheritance has been received after separation, this will not be included in a settlement. However, an adjustment may be made to the final financial settlement to account for this windfall in the future.
What about prospective inheritances?
In the event that an individual hasn't received an inheritance, but has been named as a beneficiary in someone's will, this will be classified as a prospective inheritance.
A prospective inheritance will not usually be factored into the financial distribution of a couple's joint property. However, this can occur in cases where the benefactor is close to death and there is a case for one of the parties not named as a beneficiary to receive a share of this estate.
For example, if one of the parties has made a sustained contribution to the inheritance, the courts can order that this prospective inheritance be included in a financial settlement. This is still very uncommon though, and the courts will need to be satisfied that the conditions justify the inclusion of a future inheritance in a financial settlement after a divorce.
What about subsequent contributions to an inheritance?
If your partner has received an inheritance, any subsequent contributions from you will be considered during the process of settling an estate. For example, if one party has inherited a property and the other party has then made a significant financial investment in the property, this will also be factored into the final distribution.
If you want further guidance on how to manage the process of getting a divorce, talking to a family lawyer is essential. They will have the expertise to ensure the financial settlement of your divorce is conducted effectively, especially around issues like inheritance.