Sorting out finances during divorce proceedings can be intricate and protracted, often involving untangling financial matters accumulated over years of marriage. While it’s typically clear that assets amassed during the marriage should be shared based on needs, the status of pre-existing wealth, such as inheritance or gifts, raises important questions about its inclusion in the divorce settlement. Lucy Hart, Director and Family Lawyer at Sinclair Law Solicitors, highlights this, stating, “Determining the fate of inherited wealth amidst divorce proceedings can be complex.”

What Constitutes Pre-Acquired Wealth?

The concept of pre-acquired wealth, also known as non-matrimonial property, was made clear in the landmark case of White v White [2000] UKHL 54. This encompasses assets brought into the marriage from external sources, like inheritance, gifts, or individually owned properties. The general principle dictates that individuals should retain their non-matrimonial property. However, exceptions arise when the court needs to weigh both parties’ needs against the available resources. 

Treatment of Pre-Marital Wealth

In cases where the financial resources of both parties are insufficient to meet their needs, the court may evaluate property acquired prior to the marriage alongside other assets. The court’s approach varies depending on the duration of the marriage. Longer marriages tend to blur the lines between non-matrimonial and matrimonial assets, potentially leading to shared ownership, whereas shorter marriages often result in non-matrimonial assets remaining separate. 

Inherited Wealth in Divorce Proceedings

Inherited wealth follows a similar path as pre-acquired wealth in divorce settlements. If inherited before the marriage and kept distinct from joint finances, it’s typically considered non-matrimonial property. However, if both parties have utilised the inheritance or commingled it with marital assets, its treatment shifts towards inclusion in the divorce settlement.

Consideration of Future Inheritance

Future or anticipated inheritances diverge in treatment due to their uncertain nature. While the court may consider foreseeable financial resources of each party under the Matrimonial Causes Act 1973, future inheritances are generally excluded unless their certainty can be established.

Safeguarding Pre-Acquired or Inherited Wealth

To safeguard pre-acquired or inherited assets, individuals can opt for a prenuptial agreement. Though not automatically legally binding in the UK, courts are increasingly honoring such agreements provided certain conditions are met. Lucy Hart recommends, “For significant pre-acquired wealth or inheritance, it’s advisable to formalise protections through a prenuptial agreement.”

Contact Us for a Free 30-Minute Consultation

For a detailed consultation or specialised advice on family law matters, Sinclair Law Solicitors offer a complimentary 30-minute case review. Contact our family law experts today.

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