Protecting Inherited Property on Divorce in England and Wales
We are often asked to advise in cases where one spouse has inherited a property. A common question is what happens to that property if the marriage later breaks down and the parties divorce.
In England and Wales, inherited property is not automatically protected from financial claims on divorce. However, it is usually treated differently from assets that have been built up during the marriage. The court’s primary aim is to achieve a fair outcome in accordance with the Matrimonial Causes Act 1973.
Matrimonial and Non-Matrimonial Assets
When dealing with finances on divorce, the courts generally distinguish between:
Matrimonial assets – property and wealth acquired during the marriage through the parties’ joint efforts, such as earnings, savings and the family home. These assets are normally available for sharing between the parties.
Non-matrimonial assets – assets owned before the marriage or received by one party through a gift or inheritance. Inherited property usually falls into this category.
As a starting point, inherited assets may be treated as belonging solely to the person who inherited them and can sometimes be “ring-fenced” from division.
When Inherited Property May Be Included
Despite this, inherited property can still form part of a financial settlement in certain circumstances.
The court is more likely to consider inherited assets where:
The other spouse’s financial needs, particularly their housing or income needs, cannot be met from other available resources.
The inheritance has become mixed with marital assets, for example where inherited funds have been used to purchase or improve the family home, placed into a joint account, or otherwise treated as a shared family resource.
The marriage has been long and the inherited property has played a significant role in the family’s life. In these situations, the distinction between matrimonial and non-matrimonial assets may carry less weight.
Factors the Court Will Consider
Each case is assessed on its own facts. The court will take into account:
The value of the inherited asset.
Whether it was inherited before or during the marriage.
The length of the marriage.
Whether there are dependent children.
The parties’ housing and income requirements.
Whether the inheritance has been kept separate or integrated into the family’s finances.
An Example
If a wife inherits a mortgage-free property worth £500,000 from her parents and keeps it solely in her own name, the court may be inclined to leave that property untouched if the parties have sufficient other assets available.
However, if the inherited property represents the family’s main or only significant asset, and there is a need to provide suitable housing for the other spouse and any children, the court may take the property into account to help meet those needs.
Key Point
Although inherited assets often receive special consideration, they are not automatically excluded from a divorce settlement. The likelihood of an inheritance being taken into account increases where financial needs are significant or where the asset has effectively become part of the family’s shared wealth.
Note – The treatment of inherited property can vary further depending on the type of asset involved, such as a farm, a buy-to-let property, a family home, property inherited before marriage, or assets held within a trust.
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