By Alison Green, Head of Family and Relationships
When separating from your spouse, it is understandable that one of your concerns may be your child’s access to any potential inheritance – either directly from your spouse or their close relatives.
Where a Will is in place, this will dictate how the estate is distributed and whether your child will be a beneficiary.
Getting divorced doesn’t revoke an existing Will, however, for inheritance purposes the former partner is treated as ‘deceased’ when a marriage or civil partnership is dissolved and this can affect the validity of a Will depending on how it is drafted.
Divorce can have a big impact on your estate and if the Will doesn’t specify what happens in the event of the former spouse’s death, the Intestacy Rules may apply.
These rules dictate what happens when someone dies without a valid Will or if the the Will doesn’t provide a clear path for the distribution of assets.
This means that if a Will isn’t updated to reflect the divorce, the estate may not be distributed as intended by the deceased.
This could potentially jeopardise any inheritance for the rest of the family and mean that new partners or dependants aren’t provided for.
If a child is disinherited from an estate in a Will, for example due to a partner remarrying and creating a new Will, then it may be possible to take legal action to dispute it to seek a benefit for the children from the estate.
There are a number of grounds under which a Will can be contested, including:
Whilst all points are valid, the final point on the exclusion of dependants is particularly relevant in the case of divorce or separation, where a child requires ongoing support from their deceased parent’s estate.
If you and your partner didn’t marry and later separated, you will not be entitled to benefit from their estate under the Intestacy Rules but your children will.
In the event of a person passing before their children reach 18, and if they are unmarried and have not created a valid Will, the estate will be inherited by their children, under the Rules of Intestacy.
Their children will share the estate equally. This includes children from previous relationships as well.
Dying without a Will can be a complex process and will require the appointment of an administrator in place of an executor.
To manage the estate, a relative or friend will have to apply for a “grant of letters of administration.”
This grant appoints them as the “administrator” of the estate. The administrator is then authorised to value the estate, settle any debts, and distribute the assets according to the Rules of Intestacy.
It is quite common for a partner who has received an inheritance from a family member or loved one to want to ensure that this inheritance is passed on to their children.
In such cases, the partner may seek to prevent any claims on the inheritance by their spouse in the event of a divorce and aim to protect their children’s inheritance from being affected by the divorce.
Assets acquired during a marriage through joint efforts are typically considered matrimonial property and are generally divided equally between the parties on a divorce.
Inheritances received by one party are not usually classified as matrimonial property and are, therefore, not subject to this equal division, unless the financial needs of the parties dictate otherwise or the inherited assets have been intermingled with other marital assets or they have been used by the parties to the marriage.
During a financial settlement, the court differentiates between matrimonial and non-matrimonial assets, allowing a party to keep non-matrimonial assets – such as those brought into the marriage, inherited, or gifted – unless these assets are needed to meet the financial needs of the other party or they have been used as marital during the marriage.
The treatment of an inheritance may change based on how it is managed and used over time.
For example, if it is used to purchase the family home, it may become mingled with matrimonial property and thus subject to division.
Whilst received inheritances are considered a resource of the party who has them, prospective inheritances are very rarely taken into consideration due to the potential for wills to be changed, making such assets less certain.
To protect inherited property from divorce, it should be kept entirely separate from marital assets, where possible.
This means one partner should maintain inherited money in a separate account and hold other inherited assets in their sole name.
This approach helps ensure that only they benefit from the inheritance in the event of a divorce.
Entering into a pre-nuptial or post-nuptial agreement can be another effective way to protect children’s inheritance from divorce.
If both spouses agree, such an agreement can exclude inherited money and assets from marital property, helping to prevent any claims on the inheritance during a divorce. However it should be noted that the parties cannot oust the jurisdiction of the court on divorce and therefore such an agreement cannot be 100% watertight.
Another consideration is protecting inherited assets from the children themselves or undue influence from their partner.
Many people worry that their children may not make the most financially responsible decisions at such a naïve age and use trust funds to ensure that children have an automatic right to the estate at a later age – free of influence from other parties.
If you are considering a divorce and concerned about either protecting or accessing an inheritance for your children, it is important to seek independent legal advice.
Working with a full-service law firm, which advises on both family law and private client issues, such as Wills and estates, can be a great way to protect your children’s best interests.
Mackrell.Solicitors is a full service law firm and we have years of experience supporting clients with complex matrimonial issues, including helping clients to ensure their children continue to inherit and remain supported.
If you would like to learn more about our services, please get in touch with Alison Green by calling 0207 240 0521 or emailing alison.green@mackrell.com