May 05, 2016
A death in the family is always distressing but even more so when it occurs in the midst of a relationship breakdown. In this emotional time, it is completely understandable that a client may need to take a step back from proceedings. However, it is important you consider how an inheritance may affect your position in a Family Law property settlement.
According the law of property settlements, an inheritance is classified as a windfall (an asset that has come into your possession without much effort on your behalf). It is treated differently to the financial contributions made by the parties. The time at which the inheritance was gifted may influence how it is considered and if it is divided. However, in the context of a long term relationship, the law considers an inheritance like any other asset and it will be divided between the parties.
Things get a bit more confusing when the inheritance occurs after the separation of the parties. The question becomes: should one party get a portion of the inheritance when the deceased is related to the party that they have now separated from? This is a tricky question and the answer will rest on the circumstances. There are a number of cases where the courts have considered the inheritance as part of the asset pool and simply divided up the property giving more to the party related to the deceased.
For example instead of dividing up the asset pool without the inheritance 50/50, they make the inheritance part of the asset pool and divide it 70/30 in favour of the party who was gifted the inheritance. However, your circumstances may warrant its exclusion from the asset pool. If you believe this to be the case, you must contact a lawyer to discuss your specific situation.
This area of law is complex and contains aspects of both family law and succession law. Essentially, it will depend on the facts of the case. It is good to remember, though, that the courts will always favour a property settlement that is just and equitable.
If you are looking at a family law property settlement and there has been an inheritance or to find out more about family law, and family law property settlement please contact James Frank for further advice at jfrank@franklegal.com.au or 02 9688 6023.
This article has been written by Andrea Spencer and Emily Graham and edited by James Frank.This article is provided to the reader for general information. It is not legal advice.
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