Family Lawyers in Brisbane Discuss Post Separation Inheritance

A question clients frequently raise with Family Lawyers in Brisbane is whether they must share an inheritance received post separation.

In Calvin & McTier [2017] FamCAFC125, the Full Court of the Family Court of Australia effectively found that it was appropriate to include an inheritance received post separation amongst the property of the parties to be divided by the court. The Full Court dismissed the husband’s appeal against the trial magistrate’s finding that an inheritance should be included amongst that property.

A substantial inheritance of some $430,000 had been received by the husband well after the parties had separated and it accounted for some 32% of the net assets and resources to be divided between the parties.

The magistrate had made orders dividing all of the property of the parties, including the inheritance, providing for the husband to receive 65% of the property and the wife to receive 35%.

However, although the husband appealed against the magistrate’s inclusion of the inheritance amongst the property to be divided, the husband did not seek any finding by the Full Court that if the inheritance was properly available for division between the parties, the actual division of that property by the magistrate was in error.

Family Lawyers in Brisbane

The Full Court considered:

  1. That the Court had clear power to make an order dividing the inheritance. The Court relied upon the definition (ca) of matrimonial cause set out in Section 4 of the Family Law Act as well as section 79 of that Act which refers to all of the property held by the parties at the time of the hearing before the court. This will include all property whether held by either of, or both parties, and regardless of when particular assets may have been acquired; and
  2. That the court has discretion whether to include property acquired after separation in the assets available for division between parties;
  3. That it is not necessary before the court includes property acquired after separation in the assets available for division that the court first separately considers if there is a principled reason to include it. It was not necessary in order for that after acquired property to be so included that a party show that there is some direct connection between the marriage and the property, whether direct contribution to that after acquired asset (such as caring for the donor in the case of an inheritance) or out of the ordinary contributions made by that party to the family.

The Full Court rejected the argument of the husband’s senior counsel that the court would have to find that there was a sufficient nexus or link between particular items of property acquired after separation and the parties’ marriage before that property could be included for division between parties. The husband’s counsel had sought to rely upon the High Court decision in Stanford & Stanford (2012) but the Full Court said that that case did not support the husband’s argument.   The Full Court said that Stanford does not require that there be a principled reason for the court to interfere with individual assets of parties.

The court has a discretion as to how it approaches the treatment of after acquired property such as an inheritance received post separation. The Court may choose to deal with the inheritance separately from other property or it may choose to take a global approach, including the inheritance in the one group of assets available for division between the parties.

Where an after acquired inheritance is included in the one group of assets to be divided between the parties, it may be appropriate that an adjustment is made out of those assets in favour of the party who effectively contributed that inheritance.

The husband’s counsel in Calvin & McTier had sought to rely upon a statement in the case of Bonnici (1992) to the effect that ”the other party in that case could not be regarded as contributing significantly to an inheritance received very late in the relationship” and not after the relationship had terminated, except in very unusual circumstances. However, the Full Court in Calvin & McTier said that the court in Bonnici was not intending to lay down a guideline as to how the court should treat inheritances received after separation.

Contacting Family Lawyers in Brisbane

If you have questions about what entitlement you may have in an inheritance received by your former partner or family law property settlement generally, contact our family lawyers in Brisbane who have the experience to assist you.