How does inheritance affect a financial settlement in divorce?

10th June 2015

How does inheritance affect a financial settlement in divorce?

Depositphotos_23475341_xsInheriting large sums of cash can be controversial at the best of times and you’d expect cases about them to revolve around Will disputes. However, in the context of divorce it is even more controversial – especially if this happens after a financial settlement has been agreed!

In a recent case, a woman was permitted to re-open her divorce settlement after her ex-husband inherited £180,000 on the unexpected death of his father.

The couple had reached a financial agreement on how to split their assets. The former marital home was transferred to the wife, subject to a charge in favour of the husband which entitled him to a lump sum equal to 45 per cent of its value when it was sold. This agreement was made into a court order.

Shortly after the financial agreement was reached, the husband’s father died and left him £180,000. It was recognised that his death was completely unforeseen and that the husband was unaware of his inheritance prospects when the consent order was agreed.

Despite this, the wife managed to argue that the financial settlement should be re-visited and having taken into account the £180,000 inheritance based upon her needs, the family judge decided that the husband should no longer have the benefit of a 45% interest in the former matrimonial home. The husband appealed, but was unsuccessful. The Court of Appeal decided that the inheritance undermined the basis on which the previous consent order had been made, and the revised settlement was fair in the circumstances.

These cases vary from each divorce situation and rarely would a financial agreement be re-opened. However, if you would like to talk to one of our family lawyers in relation to this or another divorce or financial matter, you will be sure to get the best advice from us. We have offices in Ipswich, Hadleigh and Felixstowe and are running out of hours appointments in Felixstowe in June, July and September at a heavily discounted rate of £75 because we understand that 9-5pm appointments don’t suit everyone.

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