When couples divorce, a particularly difficult issue can arise when one spouse expects to receive an inheritance but has not yet actually received it. Parents may be elderly, relatives may be seriously ill, or a person may know they are named in a will. Understandably, this raises concerns about whether that anticipated wealth will become relevant during divorce proceedings.
There is no automatic rule that says an expected inheritance will either definitely be included or ignored. Instead, the court will look at the circumstances of each case and consider how realistic the inheritance is, how soon it is likely to be received, and whether it would affect the fairness of any financial settlement.
What is meant by an expected inheritance?
An expected inheritance refers to money, property, or assets that someone believes they are likely to receive in the future, although they do not yet own those assets. This could include:
- A parent who has made a will leaving substantial assets to an adult child
- A grandparent who has indicated that a particular property will pass to a family member
- A relative who is terminally ill and there is a known estate plan
- A person who is already a beneficiary under a trust that will take effect upon someone’s death
Unlike an inheritance that has already been received, an expected inheritance remains uncertain. Circumstances can change; wills can be rewritten; assets can diminish and relationships between family members may alter. For that reason, courts generally approach future inheritances with caution.
Is an expected inheritance taken into account during divorce?
The court’s primary objective when dealing with financial remedies following divorce is to achieve fairness. Judges have wide discretion and must consider all the circumstances of the case, including the financial resources that each party currently has or is likely to have in the foreseeable future.
An inheritance that has not yet been received does not automatically form part of the matrimonial assets available for division. However, if there is compelling evidence that the inheritance is imminent and highly likely, it may influence the outcome.
In some cases, the existence of an expected inheritance may reduce the amount one party receives from the matrimonial asset pot, while in others, it may have no effect whatsoever.
Are there definite circumstances where the answer is yes or no?
Generally speaking, if the inheritance is merely speculative, the court is unlikely to place much weight upon it. For example, suppose a husband expects eventually to inherit from his healthy, eighty-year-old mother. Although he may believe he will receive a substantial sum one day, nobody can predict when that might occur; his mother could live for many years and could change her will at any time. In those circumstances, the court is unlikely to regard the inheritance as a present financial resource.
By contrast, if a wife is due to inherit several million pounds within weeks because probate is almost complete following the death of her father, the court is much more likely to take that forthcoming inheritance into account. The closer and more certain the inheritance, the more relevant it becomes.
Does the size of the expected inheritance matter?
The value of the anticipated inheritance can influence the court’s approach. For example, suppose a person expects to inherit around £20,000. In the context of a divorce involving assets worth several million pounds, that sum may have little significance.
However, where one spouse is likely to receive £2 million and the couple’s existing assets amount to only £500,000, the court may consider that future wealth highly relevant.
A substantial inheritance could affect issues such as housing needs, maintenance, and the overall fairness of the settlement. That said, size alone is not enough, and a large inheritance that remains speculative may still carry little weight.
How likely must the inheritance be?
Judges are interested in probability rather than mere possibility; several factors may indicate that an inheritance is likely:
- The person from whom the inheritance is expected has already died
- Probate proceedings are underway
- There is a valid will naming the beneficiary
- Assets within the estate have been identified
- There are no obvious challenges to the will
Where a relative remains alive and healthy, the anticipated inheritance is much less certain. Even if family members have made promises over many years, there is no guarantee that those promises will ultimately be fulfilled.
What evidence might be needed?
A party who argues that an inheritance should be taken into account may need evidence to support that argument.
Relevant evidence could include:
- Copies of wills, probate documents, estate accounts, trust documentation and correspondence from solicitors handling the estate.
- Medical evidence where the expected inheritance depends upon the health of the person concerned, although courts are generally reluctant to engage in speculation about life expectancy.
- Witness statements and documentary evidence showing the value and certainty of the inheritance may also assist.
The court will carefully assess the quality of the evidence before deciding what weight should be attached to the anticipated assets.
Can an inheritance received shortly after divorce lead to the settlement being revisited?
Although financial orders are intended to provide finality, there are exceptional cases in which the court may revisit a settlement. If a significant and unforeseen event occurs shortly after the order has been made, an application may be possible. For example, in circumstances where a couple finalise their financial settlement and, just a few weeks later, one spouse unexpectedly inherits several million pounds because a relative dies. Depending upon the circumstances and the timing, the other party may seek to challenge the order.
These cases are rare and highly fact-specific. The courts place great importance upon certainty and finality; therefore not every inheritance received after divorce will justify reopening matters. However, where a dramatic change occurs soon after the order and undermines the fairness of the original settlement, the court may be prepared to intervene.
What about inheritances already received?
The position is different where the inheritance has already been received before the financial settlement is determined. Inherited assets are often regarded as non-matrimonial property because they originate from outside the marriage. Nevertheless, that does not mean they are automatically protected.
Where resources are limited and one party’s needs cannot otherwise be met, inherited wealth may become available to satisfy those needs. For example, if the family home and savings are insufficient to provide suitable accommodation for both spouses, inherited assets may be taken into account.