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News & Articles

Osborne Morris & Morgan > News and Articles > Family > When inheritance and divorce settlement law clash

When inheritance and divorce settlement law clash

Posted on 22 Mar 2016, in Family

The laws regarding bequeathing an inheritance that apply in Bedfordshire give a great deal of freedom regarding the disbursement of assets. Receiving an inheritance while in the process of a divorce, however, brings two distinct legal fields into effect. In order to decide on a fair divorce settlement, a court may include a recent inheritance as being part of a couple’s financial assets. The possible conflicting aims of inheritance law and family law can lead to a legally complex and technical case.

In a situation where a couple’s assets are insufficient to provide housing for both parties after the divorce, a court that is seeking to provide an appropriate settlement may choose to include a recent inheritance when making its decision. The argument that the inheritance is not an asset that was accrued together by the couple is outweighed by the need to provide both parties with a new beginning. In seeking to achieve this goal, the court has the discretion to overrule the wishes of the person leaving the bequest.

Attempting to exclude an inheritance from proceedings by placing it into a discretionary trust is sometimes viewed unfavourably by the courts. A discretionary trust is a legal vehicle that can be used to hold the assets of an inheritance under the guardianship of a trustee who administers it on behalf of the beneficiary. Such an arrangement, if created purely for the intention of excluding assets from a settlement, can be reversed by the court.

Although family law often dictates that a fair divorce settlement involves an equal division of the marital assets, individual circumstances may have a significant effect on the final divorce settlement. If people are uncertain regarding the legal merits of their situation, they may wish to consult with a solicitor who is experienced in family law matters so that they may discuss their concerns.


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