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Husband's $3 Million Inheritance Post Separation Included in Property Pool
10 February 2015
It is not unusual for a party who has received an inheritance towards the end of a relationship or whilst separated to ask the question: "Can I exclude my inheritance from the asset pool?"
The general principle from the case of Bonnici & Bonnici is that an inheritance received late in a marriage can be excluded from the asset pool if there are other assets which will allow for a fair result. However each case depends on its own facts and circumstances and an inheritance is not always "protected".
In the recent case of Singerson & Joans the Full Court of the Family Court considered a 15 year relationship where the husband inherited about $3 million from his father's estate just before the parties separated. As a result of the husband's inheritance the property pool was increased to $7,472,575.
The parties had two children aged 13 and 10 years. The husband had worked on and off during the marriage and suffered from depression. The wife however ran a health service business and a pharmacy and averaged income of $250,000 net per annum. At the time of the trial the husband and the wife had been separated for 4 years.
The court is required to evaluate all the various contributions to the property. In this case the Full Court considered what the parties had contributed both in a financial and non-financial sense during the marriage meaning the contributions made to the welfare of the family as well as contributions made towards the accumulation of the assets.
On considering the husband's inheritance the Full Court accepted that over the 15 year relationship and the 4 years the husband and wife had been separated that the wife had made significantly higher financial contributions to the property before separation as well as providing care of the home and the children. In addition the wife had been required to carry the bulk of the responsibility for the care of the children post separation. The husband's inheritance however having been received late in the marriage had almost doubled the value of the property pool.
The Full Court then assessed that the wife should retain 47.5% ($3,549,473) and the husband 52.5% ($3,923,102) of the property pool. The assessment acknowledged the initial contributions of the husband and also his post separation inheritance. However the husband's contributions were more than matched by the wife's considerable contributions to the family both during the marriage and post separation.
What might have been the result if the husband had not received his inheritance? The wife might have received in the range of 65% of the overall asset pool based on her significant contributions during the marriage and her primary care of the children post separation. In those circumstances the wife would have received about $3,154,756 (65%) of the assets.
By the husband receiving an inheritance, the Court awarded the wife 42.5% of the overall property pool, much less than 65%. Did the inclusion of the husband's inheritance disadvantage the wife? This doesn't appear to have been the case as the wife's 42.5% amounted to $3,549,473 and extra $394,717. Therefore even though the husband received 52.5% of the property the wife increased her share of the assets by 5.28% when the Court included the husband's inheritance.
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