Family & Divorce Partner, Emily Brand provides expert commentary in the Financial Times looking at the following scenario...

Q:

My husband and I are divorcing. His father is elderly and my husband will receive a considerable inheritance when my father-in-law dies. It doesn’t seem right that our financial settlement will see me subsidise my husband when in a year or two he will be far wealthier. Is there anything I can do to get a fairer settlement?

Partner, Emily Brand saysthe family courts increasingly distinguish between “separate/non-matrimonial” and “matrimonial assets” when determining how assets should be divided between a couple following a divorce.

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Matrimonial assets are considered to be those built up by the couple during the marriage, such as the increase in value of a family home or a joint business venture. The starting point for the division of matrimonial assets is equality. For example, each spouse should receive 50 per cent of the net value.

“Separate assets” are those which one spouse might have owned before the marriage (such as shares in a public-listed company) and/or inherited and/or been gifted to them by a member of their family either before, during the marriage or shortly after the separation. As the name implies, these are likely to be kept separate (subject to what I say below) and will not be divided up as part of the matrimonial pot.

Beware though, separate assets can be converted into matrimonial assets if they have been mingled. For example, if you have used an inheritance to purchase a family home in your joint names, this asset might still be considered matrimonial even though it is derived from a separate asset.

In your case, your ex-husband’s expected inheritance (as and when it arrives) is likely to fall into the category of separate or non-matrimonial assets and by that principle would not be available for division. Added to that is the fact that it sounds as though a settlement will be reached before your father-in-law dies, making it potentially easier for a judge to disregard it.

That said, if the inheritance is likely to be substantial, the court may consider it is as a resource which your husband is likely to receive in the foreseeable future and which as such could be taken into account. However, given that your father-in-law is still alive and considerable monies might need to be spent on his care in the latter stages of his life, a court might be reluctant to assume that your husband’s expectation will materialise in its entirety. There is also the risk that your father-in-law might fall out with his son and disinherit him, in which case it might be unfair for your husband to receive less than you from the matrimonial assets.

The most likely approach is that as a first step the court will look at whether an equal division of the matrimonial assets meets your needs assessed to reflect the standard of living enjoyed by you during your marriage. If such a division fails to meet these needs, there may be a departure from an equal division of the matrimonial asset. This indirectly takes into account your husband’s expected inheritance.

It may seem unfair, however, the courts tend to be reluctant to divide up assets which have not been generated during the marriage except in the case of need.

This article was first published in the Financial Times on 11 October 2022.

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