How to Navigate Inheritance and Divorce

Getting divorced can be difficult, but when there is an inheritance involved, it becomes even more complex. If you are considering a divorce or have already filed for one and have an inheritance at stake, it’s important to know your rights.

Here, we will discuss how to navigate inheritance and divorce so that you are well-informed and prepared. 

Inheritance in a Divorce Settlement 

When a couple divorces, their assets are divided up in the divorce settlement. An inheritance may be included in this division if the other spouse has access to it or if the asset was acquired during the marriage.

In most cases, inheritances are considered non-marital property because they were not acquired during the marriage; however, it may be that an inheritance is seen as marital property if it was used by both spouses during their marriage (for example, if money from an inheritance was used to purchase a family car).  It is important to understand the law before entering into a divorce settlement. 

If you receive an inheritance after filing for divorce but before the settlement is finalised, you should consult with a solicitor because it could affect how your assets are divided. Depending on where you live and how long after filing for divorce you received the inheritance, it may be classified as marital or non-marital property subject to division in the settlement.

You should also check with your solicitor about any potential tax implications of receiving an inheritance while going through a divorce. 

Division of Property After Death 

Another issue that arises when dealing with inheritances and divorces is what happens when one spouse dies before a settlement is reached? This depends on whether or not there is a prenuptial agreement between the spouses that outlines what will happen in this situation.

If there isn’t one, then all assets will likely be divided upon death of either spouse - including any inheritances that have been passed down to them. 

Even if the surviving spouse inherits money after one spouse has died but before a settlement has been reached, they may still be required to divide those assets in accordance with the law.

It’s important to speak with a solicitor who specialises in estate planning so that both parties understand their rights and obligations when it comes to dividing an inherited asset after death.  

Inheritance can complicate divorces significantly because it involves complex legal issues and taxes that must be taken into consideration. If you or someone you know is going through a divorce and has an inheritance involved, make sure you understand your rights so that everything can be handled fairly between both parties.

An experienced estate planning solicitor can help ensure that all of your interests are protected throughout this process - and beyond.