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If either party has inherited money, land or property in the past, these assets will need to be taken into account in any financial settlement. The general rule relating to inherited wealth is that all inherited assets will be considered, unless there is a good reason for them not to be. One such reason, would be that a particular asset had been “ring fenced”. Each case will depend on its own facts. In a judgement given by the Court of Appeal the court ruled that the settlement payable by the husband, who had very considerable inherited wealth, should be reduced from £8 million to £7 million, despite the couple having a very long marriage. The decision was made after the factors listed below had been taken into account, the court stressing that the objective in such cases is to achieve a just result:
- The fact that wealth was inherited and not earned justifies it being treated differently from wealth accumulated during the marriage
- The nature of the inherited wealth must also be taken into account – an investment portfolio would not be treated in the same way as, for example, an ancestral home. This might be a good reason for departing from the equality principle which might otherwise apply
- The duration of the marriage may be in point if it determines the time the wealth has been enjoyed by both parties
- The standard of living provided by the inherited wealth would also be in point, as would the extent to which it has been added to or depleted. In principle, the longer the wealth has been enjoyed by both parties to the marriage, the less fair it would be to ‘ring-fence’ it in a settlement.
There is, said the court, no formula which applies: what constitutes a fair division of assets in each case will depend on the individual facts.
Can we help you?
If you would like to discuss the treatment of inherited wealth and your entitlement then please do not hesitate to call Colleen on 01242 517949, 01792 892692 or 01993 220651. Alternatively, please email us at email@example.com. We’re here to help.