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But He’s Going to Inherit Millions from his Mum’s Estate! – Inheritances Received Post Separation. Are they in or out?

A question that often arises in the context of a Family Law property settlement is “My ex is going to inherit thousands from X, will that be considered?”, and in a similar vein “Will my ex be able to make a claim on any inheritance I receive from X in the future?”

The short answer is no, not unless the inheritance has crystallised prior to entering into a legally binding agreement with respect to how the matrimonial asset pool is to be divided.

In this context ‘crystallised’ means the Testator has died and therefore is unable to alter their Will.  An expectation of an inheritance will generally not be considered an asset by the Family Law Courts in determining the just and equitable division of the asset pool.

The exception to this general principle is if the Testator is still alive prior to the parties entering into a legally binding agreement with respect to how the matrimonial asset pool is to be divided, but has lost capacity to alter their Will and the death of the Testator is fairly imminent.  The Court may then include the value of the anticipated inheritance in the asset pool available for distribution.

Outside of the above exception, whilst an expectation to receive an inheritance will not usually be classified as an asset and included in the pool available for distribution, under 75(2)(b) and 90SF(3)(b) of the Family Law Act (Cth) 1975 (“FLA”), it may be considered a financial resource.  A financial resource doesn’t impact the net value of the asset pool but it may impact the percentage of the pool a party is entitled to.

Other grounds on which an expectation of an inheritance are arguably relevant are:

  • Sections 75(2)(o) and 90SF(3)(r) of the FLA require the Court to consider “any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account”
  • Sections 79(5) and 90SM(6) of the FLA enable the Court to adjourn Family Law property settlement proceedings if “there is likely to be a significant change in the financial circumstances of the parties to the marriage or either of them” (s 79(5)(a) wording)
  • Sections 79(2) and 90SM(3) require the Court to only make an order if “it is satisfied that, in all the circumstances, it is just and equitable to make the order”.

As is the nature of Family Law matters, how an expectation of an inheritance is treated will depend on the particular facts of the case.

Please contact Doolan Callaghan Family Lawyers so we may provide you with advice specific to you and your circumstances.

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