How to manage an inheritance of a deceased relative post separation, read on…
My father passed away about two months before my husband and I separated last year. Upon separation, we amicably split all assets and cash and agreed on a parenting plan for our young daughter. There was no family home nor anything of significant value involved.
I am executor of my father’s will and probate is still some way off being granted. As my father passed away before my husband and I separated, is he legally entitled to a significant portion of my dad’s inheritance when it comes through, or only the amount that I have already agreed to give him? How much time goes past before he is no longer able to make a claim?
It appears that when you amicably split your assets, you may not have formalised your Family Law property settlement with your husband in a final and binding manner. The only way to make an agreement binding is by filing an Application for Consent Orders at the Family Court, or entering into a Binding Financial Agreement in the approved form. Formalising your property settlement in one of these ways means that no further claim can be brought against you for property settlement. There is no reason why you could not seek the consent of your husband to formalise your property settlement on the basis that your inheritance is excluded.
If you and your husband cannot agree to exclude your inheritance from your property settlement then there is a risk that he will not honour your amicable agreement and will make a claim against you. Several factors will be considered when assessing whether the inheritance is an asset that can be considered as part of the matrimonial assets available for division. These factors can include the timing of the inheritance, the financial or non-financial contributions that your former husband made to the inheritance such as assisting your father during his life time, the value of the balance of your matrimonial assets and liabilities (including entitlements such as superannuation) and the value of the inheritance. In circumstances where the inheritance is received following separation but before a binding property settlement the inheritance can be quarantined from the assets available for division, considered a “financial resource” or considered an asset available for division depending on various factors including those discussed above. There are also a number of time limitations that apply.
In the circumstances, you should obtain legal advice at the earliest opportunity so that your rights, entitlements and obligations can be explained to you.
Be gentle with yourself. Counselling may be helpful as you process grief following the death of your father and loss of your relationship.
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