Dividing up the matrimonial pool of assets following a separation is always a stressful time. There are a number of factors that need to be considered, including identifying all the assets and liabilities, assessing the parties’ contributions, considering the length of the marriage or de facto relationship, and looking at the respective parties’ future needs.
One factor that’s often overlooked in undertaking such process, but which should not be, is the potential or likely future inheritance/s of a party. If you’re in the midst of this process now, and are aware your ex is set to come in to some big dollars when old Aunty Mavis passes on, while you’re not set to inherit anything, that issue should not be ignored.
Property or Financial Resource
The term ‘property’, as it’s applied pursuant to s79 of the Family Law Act, is given a very wide meaning. It’s basically any item or chose in action to which either party is entitled. It will include such thing as shares, bonds and land. But for an asset to be included in the matrimonial pool for family law purposes, it needs to exist, or be realized, as at the date of trial or separation of assets, i.e. today. Accordingly, if old Aunty Mavis is still hanging on to dear life, and the beneficial entitlement of your ex has not yet realized, that entitlement will not be considered an ‘asset’.
The Family Law Act, however, also considers the respective parties future needs, including an assessment of the financial resources available to them, and this is where an expected inheritance can come into play. Here, if Party A has a modest income, primary care and control of the children of the marriage, and no other sources of income, while party B (who may also have a modest income) is expected to be swimming in cash in the not too distant future, it is likely Party A may receive more of the existing matrimonial pool, by way of adjustment accounting for that party’s future needs and in consideration of the financial resources of the other.
Other Factors To Consider
But don’t start cracking out the champers and toasting to old Aunty Mavis just yet, there are a number of factors that will be considered in assessing a future inheritance and the weight to be attributed to it in the division of property pursuant to the Family Law Act. They include:
- The likelihood of the inheritance – being the beneficiary of an estate of a young, fit person is unlikely to have any relevance;
- The nature of the estate – is the inheritance absolute, residual, or discretionary in the hands of a trustee? – each of these factors will be looked at; and
- The evidence available – it’s all well and good to claim your spouse is set to inherit millions, but where’s the proof?
The Obligation of Financial Disclosure
Parties to Family Court proceedings or prospective proceedings have a statutory obligation to disclose documents (for example, deed of gift) and material relevant to their respective financial positions. This includes a ‘pre-action’ obligation, i.e. even before you go to Court. So if you suspect your ex is coming into money, you should ask for the relevant disclosure to evidence that claim.
If you require any assistance to apply this law to your facts, or advance your disclosure requests, you should contact a Family Lawyer.