Inheritances and Divorce
When a relationship breaks down and parties have assets that need to be divided, it is common for the party who has been the recipient of an inheritance during the relationship to want to quarantine this asset or money because it was gifted to them, so should be retained by them.
Not necessarily. A division of property under the Family Law Act considers all assets and liabilities of both parties, whether separately or jointly, which can include inheritances.
If an inheritance is received by a party during a relationship (and sometimes post separation as well), it will usually be accounted for by factoring the value of that contribution to the asset pool by the beneficiary of that inheritance, increasing the percentage entitlement of that beneficiary party.
However, there are also circumstances where it is appropriate, and may be ordered by the court, to be excluded from the division of property of the parties and retained by the beneficiary party separately from the other property that is to be divided.
The factors that determine which is the most appropriate way to consider an inheritance are varied and require personalised and specialist advice.