Divorce and Inheritence

Divorce and Inheritence

We get asked so many times about inheritance when going through a divorce.  A common issue is when the marriage has benefited from one spouse’s inheritance. This would go into the family pot now but the other spouse has an inheritance in the future.

Generally, all assets of the marriage are pooled and treated as joint assets in a divorce. Money and property that have been inherited are included in the assets to be divided.

However, every case is different. The size of the inheritance, when it was received, how it was dealt with during the marriage all affect how it is dealt with during the divorce. The financial needs of one or both parties may mean that inherited assets have to go into the ‘pot’.

Although each case is different, we are able to share some guidelines based on our experience and previous court cases. We have split them into previous inheritances and future inheritances (those yet to be received but due).

Previous Inheritance

Inherited assets that are transferred to joint names or used for the benefit of the couple/family, they are likely to form part of the ‘pot’ of matrimonial assets available for division by the Court.

Inherited assets received shortly before the breakdown of the marriage are less likely to be included in the matrimonial assets for division. This will depend on whether the other assets are sufficient to meet the couple’s or family’s future needs.

The needs of the family, whether there are children, will be the primary consideration for the court. Inherited assets or assets derived from the inheritance can be transferred to the other party to meet those needs of the family.

Future Inheritance

Usually, future inheritance is not taken into account when dealing with the financial aspects of a divorce. It may be, if it is expected that the person making the bequest will die in the near future and the future inheritance is likely to be substantial. Courts may even adjourn the proceedings until the inheritance is received.

The big question is “when is that future” going to occur? There are a number of pertinent questions which will undoubtedly upset one party. Looking at when someone will die is, as you can imagine, like asking how long is a piece of string?  Should one take less of a settlement now because they may get some benefit in the future? And don’t forget wills can be changed. However, if the money has already been placed in a trust then this would be deemed as a definite benefit.  But once again only in the future just like a pension is a benefit to one or both but only in the future if they are years from retirement.

Can a Consent Order be contested?

Can a Consent Order be contested?

 In a recent court hearing, the judge dismissed an application to set aside a consent order made by the wife.  The wife claimed that she received insufficient legal advice prior to the consent order.  Her claim was that the husband told her to use a law firm that did not have a family law department, but was solely a commercial law firm.

She also claimed the husband did not disclose all financial material, claiming he moved the funds of a $5 million property sale into a trust that benefitted him.  The husband said he did not have any beneficial interest in the trust, saying it was used to pay debts.

The judge declined the application to have the consent order set aside. This is because the presiding judge at the time would not of agreed to the consent order if it were unfair.  So it wouldn’t matter if the wife had legal advice or not, a judge would never approve a consent order if it were unfair. 

With regard to the non-disclosure in this case, the judge stated the wife’s claim there was non-disclosure of assets were unfounded.  The trust she had mentioned as being hidden, was actually disclosed in the Form E (statement of assets).

So how can a consent order be contested after it has been agreed by a judge?

Consent Orders and other financial settlement orders made in divorce settlements are designed to be final. For this reason judges are very wary of allowing any challenges against them on appeal. There is even a school of thought that Consent Orders themselves cannot be appealed against, simply by virtue of the fact that the people involved have agreed them.

A challenge to a Financial Order might be made for one of the following reasons:

  1. Non-disclosure of relevant facts
    In financial disclosure, one party fails to tell the other about assets or the true value of assets. Even failing to tell the other about a job offer with a substantial pay rise will be cause.
  2. Fraud & Misrepresentation
    If one party fraudulently mis-values an asset with the intention of affecting the financial order.
  3. New and Subsequent events
    This could be where something significant happens shortly after the approval of the financial order.  An example might be where the family home is transferred to the wife as she was primary carer of the children.  Shortly following the approval, the wife died, leaving the house in her will.
  4. Undue influence
    One party may apply an unreasonable amount of influence over the other party to sign the consent order

Judges do not want to open the floodgates to challenges to financial orders , so in order to challenge a financial order, there must be very strong grounds for doing so.  Financial orders will unlikely be altered unless there is substantial evidence to change the outcome of the order.

Not having a consent order? Are you really sure?

Not having a consent order?
Are you really sure?

If you fail to get a consent order as part of your divorce, your ex can make a financial claim upon you years after the divorce has been finalised?

If you benefit from a lottery win or more likely an inheritance, do you want to share it with your ex-partner?

More than likely, the answer is No.  If you dont trust your ex-partner to spend all their share of the assets and then come back to you pleading poverty, then a consent order will give you that legal protection to prevent this from happening.

A consent order is a legally binding court order which sets out your agreement about your assets. You get it before you finalise your divorce and depending on the level of your assets, it will not cost a lot. If your case is suitable, you can have a ‘clean break’ consent order. This means you have no financial ties with each other in the future, i.e. there are no maintenance payments.

So how do you stop this from happening?

Get a consent-order, it is as simple as that.  The cost will be negligable in comparison to any costs you may incur you ex may claim from you.

If you use our consent order package before finalising your divorce, it will cost just £99, but could save you thousands of pounds in the future. It ensures that your ex can never change their mind about the agreement and come back for more. We have had many queries from people who have lost money because they divorced with a consent order.

There was a case where a husband gave the family home to his ex because he wanted the divorce to be completed quickly. They did not get the divorce settlement approved by the court. Two years later he remarried and had young children with his new wife. All was well and he was happy, until he received a letter from his ex’s solicitor, asking for a large lump sum. A lengthy court battle ensued and he nearly lost his home due to the cost of the proceedings. A consent order would have set out the divorce settlement in clear terms, i.e. that the wife gets the matrimonial home and no other claims are to be made by either party.  This would have prevented his ex from ever making a claim upon him and he would never have heard from her.

I trust my Ex and we don’t have many assets

There are many excuses people make for not getting a consent order. What they don’t account for is that people and circumstances change. Don’t make excuses, take action and protect your financial future. Drafting a consent order doesn’t take long and it is worth investing £99 in your peace of mind. Having a consent order means you can move on with your life, without worrying about what may happen in the future.

If you have few assets then our DIY consent order is the perfect way to ensure you are protected in the future.


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