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Inheritance & Divorce: North & South

A recent divorce case in England has hit the headlines on account of its rather unusual facts:

http://www.bbc.co.uk/news/uk-england-london-13392591

The case highlights a difference in the way inheritances are treated north and south of the border. Here, we take a look at the way in which inheritances are treated upon separation or divorce in Scotland:

K v L - the English approach

Although inheritances may be ring-fenced in England, judges have a wide discretion. Whether or not an inheritance will be brought into account will depend on an assessment of the assets and needs of the parties.

How does Scots law treat inheritance on divorce and separation?

In Scotland, assets inherited during the marriage are excluded from "the pot" of matrimonial property to be divided between the parties. If, however, inherited assets change form during the marriage, for example if inherited money is used to purchase a house or other assets prior to separation, then the item or items acquired will become matrimonial property and may be subject to a financial claim by the other spouse on divorce. 
In the event of "conversion" of inheritance into matrimonial property, arguments can be advanced whereby credit is sought for the original inheritance. How much credit, if any, is given is ultimately down to the discretion of a court.

How would K v L have been decided in Scotland?

The assets inherited by the wife in K v L were share certificates, and remained in the same form throughout the course of the marriage. If the case had come before a Scottish court, it is likely that the inheritance would have been excluded from the calculation of matrimonial property and that the husband would have had no claim on these very valuable assets.

Post-nuptial agreements

If you are concerned about protecting an inheritance you have received before or during a marriage, you may not wish to wait until difficulties arise in the marriage.  A carefully worded post-nuptial agreement can safeguard inherited assets.  Simpson & Marwick's family law team can assist you in putting such an agreement in place.

Call our specialist team now for advice on inheritance, divorce/separation, post-nuptial agreements and all areas of Family Law.