At some point during our lifetimes, most of us will receive some sort of inheritance. This can range from personal items handed down from a grandparent or parent to larger, more valuable assets, such as property or a financial share of an estate. In most cases, the law reflects the intention that the inheritance was meant for you. However, whether that inheritance, including any inherited property, remains yours through a divorce depends on several factors that are easily overlooked. If not considered correctly, the consequences of getting it wrong can be significant.
Inherited Assets are Not Automatically Part of the Divorce Settlement
Section 25 of the Matrimonial Causes Act 1973 (the Act) provides the basis on which the English and Welsh Courts should treat financial claims in a divorce, drawing a distinction between matrimonial and non-matrimonial property. Matrimonial property covers assets built up during the marriage, including property, finances, savings, and pensions, through the joint efforts of both parties. Non-matrimonial property includes assets acquired outside the marriage, such as inheritances, gifts, and property or business assets owned before the relationship or marriage began.
Typically, non-matrimonial assets are not automatically subject to equal sharing on divorce. As a starting point, they sit outside the ‘marital pot’ and are not included in the financial claim.
This principle was confirmed and clarified by the Supreme Court in Standish v Standish [2025], a landmark ruling on how courts should treat marital and premarital assets in financial proceedings. The Court confirmed that the origin of an asset and the intentions behind any transfers both matter when deciding how it should be treated. This means that if you have received an inheritance and it has retained its original purpose throughout your marriage, there is a strong argument for keeping it outside a divorce settlement.
We covered this in more detail in our previous article on that case, ‘Standish v Standish: Supreme Court Clarifies Division of Assets on Divorce’.
When Can Inherited Property Be Considered?
Although the starting point is that inherited assets specifically gifted to one party are excluded from a divorce settlement, there is no guarantee this position will hold. There are circumstances where inherited property can be treated as part of the shared assets, and it is worth understanding when that applies.
The most common factor taken into account is need. If the premarital assets of one spouse are required to meet the reasonable needs of the other spouse, especially if children are involved, the court may consider those assets. Typically, this is more likely to happen when an inherited property has become the family home, or where one partner has significantly fewer assets.
The length of the marriage is also taken into consideration. In shorter marriages, it is more likely that there will be a greater focus on the distinction between marital and premarital property. In longer marriages, the distinction becomes less obvious because the two can become harder to separate over time.
What Are “Mingled” Assets and Why Does It Matter?
One of the most important concepts to understand is something family lawyers often refer to as “mingling”. When assets or an inheritance become intertwined with the joint finances of a marriage, it can lose its non-matrimonial distinction entirely.
To give an example, if you have inherited a sum of money and deposit it into a joint account which is then used for household expenses, it becomes very difficult to argue that those funds have remained separate. Similarly, if you use an inheritance to fund significant renovations to the family home, that asset has now become absorbed into your shared property.
The Standish case provides clarification here. Mr Standish transferred approximately £80 million into his wife’s name for inheritance tax planning purposes, but the Supreme Court found that the transfer did not make those funds matrimonial property. What mattered was whether the couple had actually treated those assets as part of their shared financial life. As they had not, the original character of those assets was preserved.
The practical lesson to take from this is that how you treat inherited property during a marriage can matter just as much as where it came from.
How Can You Protect Inherited Property?
There are practical steps you can take to reduce the risk of inherited assets being drawn into a financial settlement. Setting up prenuptial and postnuptial agreements is one of the clearest ways to record both parties’ intentions about specific assets, including inheritance.
While these documents are not automatically binding in the UK, a well-drafted agreement entered into freely, and with independent legal advice, carries real weight in the courts.
Beyond that, keeping inherited assets genuinely separate helps build the case that they have retained their non-matrimonial distinction. Maintaining them in your sole name, avoiding mixing them with joint accounts, and keeping records of the fund’s origin can all contribute to a clearer picture.
Early Legal Support Can Make All the Difference
Whether you are considering protecting an inheritance or working through a financial settlement following a separation, taking early legal advice can make a significant difference.
At O’Donnell Solicitors, our specialist family law team regularly advises on matrimonial finance cases, including those in which the treatment of inherited or premarital wealth is a central issue. We are also experienced in handling complex financial and international divorce cases.
Whatever your circumstances, we’re here to guide you through the process with clarity and care. Get in touch with us today for a confidential discussion about your situation.
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