What is inheritance?
When a person dies, their assets are distributed to others. This can be done in accordance with their Will or in line with statutory guidelines, known as the Intestacy Rules where they have died without a Will.
Inheritance is the objects or assets you or others receive from the Deceased’s estate after their passing. These can be sentimental items with little to no financial value, or assets with monetary value such as cash assets, property, antique items, jewellery or other investments.
Who can I inherit from?
You can inherit assets from anyone who names you in their Will as a beneficiary. This can be a close family member, distant relative or friend. Provided:
- the Deceased’s Will is valid
- you are named as a beneficiary
- there are no issues as to the validity of the specific clause leaving assets to you, and,
- the Deceased’s Estate is administered correctly;
You will receive the gift they wished for you to receive following their death.
If you consider that there is a lack of financial provision under the Will for you, then you are entitled to make an application to the Court under the Inheritance (Provision for Family and Dependants) Act 1975. We would recommend that you seek legal advice if you find yourself in a position where there has been inadequate financial provision made for you under a Will.
How can I inherit if there is no Will?
If there is no Will then following the Deceased’s passing, the Intestacy Rules apply. Under the Intestacy rules, the Deceased’s surviving spouse will receive all of their estate if it is worth up to £322,000.00.
If it is worth over £322,000.00 then their surviving spouse will receive the value of £322,000.00, all personal possessions of the Deceased and half the value of the estate that is worth over £322,000.00. The remainder half is then divided between the Deceased’s children.
If there is no surviving spouse then the estate is shared equally between the surviving children.
How can I inherit as a spouse?
If your spouse has a Will, then upon their passing you would receive the proportion of their Estate as specified within their Will.
If your spouse does not have a Will, then upon their passing, you would inherit under the rules of intestacy as outlined above.
You may also inherit certain benefits that fall outside of the Will, such as under pensions or life insurance policies as the Deceased’s spouse or named beneficiary.
Is inheritance relevant during divorce?
During divorce, matrimonial assets must be divided between the parties. The starting point for the court is that this is done on a 50-50 basis. Inheritance received by either party may be considered during the course of resolving matrimonial finances. Inheritance may have been received prior to the marriage, during the course of the marriage or even after.
During divorce proceedings, the party who has received an inheritance commonly argues that the inheritance should not be considered as part of the matrimonial ‘pot’ of assets to be divided between you. There are certain situations where you may wish to seek rights towards your spouse’s inheritance.
Will I receive a share of my spouse’s inheritance?
If your spouse receives an inheritance before or during your marriage, it can be possible to claim that you both shared the benefit of the inheritance during the course of the marriage. For example, where part of their inheritance was used to fund repairs to the family home or to pay for a holiday for you both. It can then be a potential argument that you both shared the benefit of the inheritance during the course of the marriage.
It is important that we are able to demonstrate to the Court that the inheritance was intended to be for the benefit of your family rather than just your spouse. One way of showing this is where the inheritance was paid into a joint account you both shared.
What if I receive an inheritance during the course of my divorce?
If you receive an inheritance during the course of your divorce, then it is likely that your Spouse will raise the argument that this should be considered as part of matrimonial assets and divided between you both.
At this point it is apparent that the funds were never shared between you and nor have they been for the benefit of the family. It is a common argument that this should not be considered part of the matrimonial pot and ‘ring-fenced.’
Matrimonial Finances are considered on the basis of needs. If your spouse is able to establish that their financial needs are such that it would not be fair to ‘ring-fence’ your inheritance and disregard it for the purposes of distributing assets then the Court could order a proportion to be shared with your spouse.
What if I receive an inheritance after my divorce proceedings have concluded?
If the divorce has concluded and matrimonial finances resolved when you receive an inheritance then this will be regarded as your property. There are no proceedings that can be brought at this stage arising out of your divorce by your spouse seeking a claim to this inheritance.
If you are made aware of the forthcoming inheritance during the divorce then you are under a duty of ongoing financial disclosure and must notify your spouse. In situations where you both have little assets, and the inheritance would make a substantial difference then the Court can postpone financial proceedings until the inheritance is received in order to consider all matters regarding the inheritance, divorce and any entitlement to this from your spouse.
Can I inherit as an spouse where my Spouse dies?
Depending on what stage you were both at in relation to your divorce, there can be provisions made for you to receive a proportion of the Deceased’s estate. We shall explore each of the possible scenarios below.
Can I inherit if my spouse dies during separation, prior to divorce?
If your spouse dies whilst you are separated but no divorce proceedings have commenced, then you are still regarded as legally married. Separation is not the same as being formally divorced.
In the event your spouse dies during separation, it is important to establish whether there was a Will. If there is a Will, you must consider whether you are named as Executor or Beneficiary. If you are not named in the Will, perhaps in the event your spouse has prepared a new Will, then you may have grounds for a claim under the Inheritance (Provision for Family and Dependants) Act 1975.
If there is no Will, you would benefit from the Deceased’s Estate under the Intestacy Rules.
Can I inherit if my spouse dies during the course of divorce proceedings?
You are considered legally married to your spouse until the point of Final Order of divorce, which replaces your marriage certificate. If the Divorce Application has been lodged with the Court when your spouse has died, then you are still legally married so would be classed as a Widow/Widower.
You must make the same enquiries in respect of the existence of a Will as above.
What if my spouse dies before a financial order is made?
If you were in the process of negotiating financial matters arising out of your divorce, and no Decree Absolute or Final Order has been made then you are still classed as the Deceased’s Widow/Widower.
You should be entitled to their Estate under any provisions made under the Will or under the Intestacy Rules if there is no Will.
What if my spouse dies after a financial order is made but before the Final Order of Divorce?
If a Financial Order resolving matrimonial finances has been approved by the Court then you will be able to rely on the provisions of the Order which will allow you to inherit the amounts detailed within the Financial Order. You will not be entitled to any sums above the detailed amount as it would be considered that matrimonial assets had been divided between you.
What if I wanted to preserve my inheritance?
Claims on your inheritance can be prevented where it can be established that the inheritance was not combined with matrimonial assets. For example, if you have received cash assets, keeping this in a separate bank account than a shared account may assist in demonstrating you had intended this was to be retained as a separate asset.
If the inheritance was received before you married your spouse, then a pre-nuptial agreement can be entered into which specifies that the inheritance received is to remain as your separate property.
If you received the inheritance after you and your spouse married, you can enter into a post-nuptial agreement which clarifies your respective agreement in relation to the inheritance and its classification as your Separate Property which is not to be taken into account in the event you both divorce.
If you intend to preserve your inheritance to pass onto children or other family members, the inheritance can be placed in a trust with the beneficiaries being named as the children or other nominated family member.