Whether a husband, wife or partner is entitled to benefit from an inheritance depends on the individual circumstances of the case. When parties are involved in a property settlement, a Court is required to assess the parties’ financial circumstances to ensure that an outcome is just and equitable. This assessment includes the financial contributions made by each party, along with any inheritance received during or after the relationship.
How does the Court approach this question:
When dealing with an inheritance in a property settlement, the Family Court examines the inheritance as a financial contribution made to the property interests of the parties. The Court will take one of the two following approaches:
Global Approach
The global approach in family law property disputes involves pooling all the parties’ assets and liabilities into a single combined pool and dividing it according to the traditional four-step process. This approach is preferred in most cases and allows the court to assess the contributions of each party towards the overall asset pool.
Asset-by-asset approach
The court also has the discretion to consider individual contributions to specific items of property, which is known as the asset-by-asset approach. This approach is less common but can be applied in certain circumstances, such as significant superannuation or specific inheritance situations. The choice between the global and asset-by-asset approaches depends on the individual facts of each case and the court’s discretion.
What if I receive my inheritance after separation
Inheritance can very well be considered in a property settlement after separation as the Court is required to consider the parties overall financial circumstances when making property orders. In the matter of Calvin v McTier in 2017, the appeals division of the Court confirmed that all property held by either party can potentially be the subject of property orders, regardless of when particular assets were acquired. However, the matter affirmed the position that Judges retain discretion to determine how property acquire after separation should be treated based on the induvial circumstances of the case.
What if I am expected to receive inheritance in the near future
In most cases, future inheritance will not be considered as part of a property settlement because it is uncertain, However, if an inheritance becomes a near certainty, it may become relevant. In the matter of Tulloch v White, the husband sought consideration of the wife’s expected inheritance from her mother’s estate. Evidence showed that the husband had performed substantial improvement and maintenance work on properties owned by the wife’s mother without payment. The Court found it would be unjust to ignore the likely inheritance, particularly because the husband’s contributions had improved the value of the properties that the wife would likely inherit. This demonstrates that future inheritance may become relevant where there is a worthwhile connection between the expected inheritance and the issues before the court.
