Can your inheritance be excluded from the joint asset pool when you get divorced?

This question often arises at the end of the relationship where one or both of the parties received a large inheritance during their marriage. Most people don’t consider this when entering into pre-nuptial agreements and then have to deal with inheritance money at the breakdown of the relationship.

The Family Court recently had to consider what to do with a property settlement where one party inherited a large sum during the marriage. The Court’s approach in this case is a good indication of what the Court will decide in similar matters.

The facts of the case

A few months after the couple got married the wife received an inheritance of $3,5 million. It included a company that provided the wife with a substantial annual income, and some investment properties. The husband also worked during the marriage.

The issue to be decided

Should the inheritance assets be isolated and excluded when distributing the joint assets, or should everything be included in the joint asset pool for distribution?

The wife argued that only the property and assets jointly acquired during the marriage should form part of the joint asset pool to be divided between the parties. She wanted the inheritance and her post-separation assets to be excluded from the division.

what did the court say?

The Court did not agree with the wife’s argument. The Court further stated that the wife generally downplayed the husband’s contribution during their 9 year marriage, especially his non-financial contribution to the care of their child.

The Court held that all assets should be included in the property pool, including the inheritance. It was noted that the wife’s financial contribution to the joint asset pool was significantly greater than the husband’s and the Court determined that the husband should receive 8% of the joint asset pool for his contributions.

The Court awarded a further 2% to the husband, taking into account that the wife’s earning capacity and financial resources were superior to his. The wife kept the balance of the assets.

From this case it is clear that your inheritance can be included in the joint asset pool when determining property settlements. It should be noted however that each situation is unique and the outcomes of Family Law matters can never be predicted with certainty. It is always worth getting legal advice from an expert in this field.