How to protect inheritance from divorce or dissolution of a civil partnership

Divorce or dissolution can be a challenging process, especially when it comes to safeguarding inherited assets. At Moore Barlow, we understand the importance of protecting your inheritance. This comprehensive guide outlines key strategies and legal considerations to help you preserve your inherited wealth during divorce or dissolution proceedings.

Understanding inheritance in divorce or dissolution

Inheritance, whether received before or during marriage or civil partnership, can become a contentious issue in divorce or dissolution settlements. The court’s approach to dividing assets includes assessing all financial resources of both parties, which may include inherited assets. However, there are ways to try to protect these assets from being divided.

Legal principles and inheritance

The Matrimonial Causes Act 1973 provides the framework for asset division in the UK, focusing on fairness and ensuring both parties needs are met. Courts consider factors such as the duration of the marriage, the financial needs of both parties, and their contributions to the family. While inheritances are generally regarded as non-matrimonial property, they can be considered if they have been mingled with marital assets or if the needs of the parties cannot be met unless the inheritance is included within the division.

Strategies to protect your inheritance

Protecting your inheritance from divorce requires a proactive and strategic approach. Here are several key strategies to ensure your inherited assets remain safeguarded:

Keep inheritances separate

To maintain the distinction between inherited assets and marital property, avoid using your inheritance for joint expenses or investments. Keep these funds in separate accounts and do not invest them in property that will serve as the matrimonial home. This clear separation helps in treating the inheritance as non-matrimonial property.

Maintain detailed records

Documenting the source and use of your inheritance is crucial. Keep meticulous records that show the inheritance was not mingled with marital assets. This is especially important if the inheritance was received long before the divorce or dissolution, as it provides evidence that these assets remained separate throughout the marriage or civil partnership.

Engage in careful estate planning

Estate planning can provide additional layers of protection for your inheritance. Inform your professional advisors of your intent to protect your inheritance from divorce or dissolution. This ensures that any estate or tax planning does not inadvertently compromise your assets by transferring them into joint names or marital property.

Seek legal advice

Consulting a family lawyer is essential for understanding the potential exposure of your inheritance in a divorce or dissolution. A legal expert can assess your specific circumstances and recommend tailored strategies to protect your assets. This is particularly important if your inheritance constitutes a significant portion of your overall assets.

Implement prenuptial and postnuptial agreements

Prenuptial and postnuptial agreements are among the most effective tools for protecting your inheritance. These agreements can clearly delineate which assets are considered matrimonial and which are non-matrimonial. By defining how inheritances will be treated in the event of a divorce or dissolution, these agreements provide clarity and security. Ensure that these agreements are properly executed and meet all legal requirements to be upheld in court.

Use trusts to protect assets

Setting up a trust can offer significant protection for your inherited assets. Trusts can help keep your inheritance separate from marital property and provide a legal barrier against claims during divorce or dissolution proceedings. By placing your inheritance in a trust, you can control how and when the assets are distributed, further safeguarding them from being divided.

Practical steps for safeguarding inheritance

Regular legal reviews

Engaging with experienced solicitors is essential to try to protect your inheritance. Regular reviews of your financial situation and inheritance arrangements can help ensure that your assets are safeguarded and compliant with current laws. Solicitors can provide tailored advice and update agreements as necessary to reflect any changes in your circumstances.

Documentation and transparency

Keeping thorough documentation of your inheritance is vital. This includes records of how and when the inheritance was received, and maintaining separate accounts for inherited funds. Transparency and clear documentation can strengthen your position if your inheritance is challenged during divorce or dissolution proceedings.

The role of the court

Courts assess each case individually, focusing on achieving a fair outcome and ensuring both parties needs are met. They consider factors such as the timing of the inheritance, its use during the marriage or civil partnership, and the financial needs of both parties. While the court may recognise an inheritance as non-matrimonial, it can be included in the division if it is needed to meet the reasonable needs of both parties.

Addressing future inheritances

Future inheritances can also be a concern in divorce or dissolution settlements. Although not typically included in asset division due to their speculative nature, they can be considered if there is a strong likelihood of substantial inheritance in the immediate future. Legal strategies, such as prenuptial and postnuptial agreements, can help address these concerns and protect future inheritances.

How Moore Barlow can help

Protecting your inheritance during a divorce or dissolution of a civil partnership requires careful planning and legal expertise. At Moore Barlow, we are committed to helping you safeguard your inherited assets through tailored legal strategies and comprehensive support. By understanding the legal principles, employing effective strategies, and maintaining clear documentation, you can ensure your inheritance remains protected.

Understanding the complexities of inheritance and divorce or dissolution is crucial to ensuring your financial interests are safeguarded. Taking proactive steps, seeking expert legal advice, and employing strategic measures can provide peace of mind and secure your inheritance for the future.

Contact our team today