Many people come to us understandably worried about what happens to an inheritance when a relationship ends. You may be wondering:

These questions are stressful, especially when the inheritance comes from someone you loved. At Hazel Family Law and Mediation, we help people navigate these issues with empathy and clear advice.

Are inheritances included in the asset pool?

In most property settlements, all assets and liabilities, including superannuation, are considered. This applies whether something was:

There is no automatic rule about how an inheritance will be treated in a property settlement. The Court approaches each case based on its individual facts and by applying the relevant principles in the Family Law Act 1975 (Cth).

How the Court decides what is fair

The Court will need to consider:

Inheritances received during the relationship are often treated as part of the shared property pool, especially if they were used for family purposes, for example, to buy a home or pay off a mortgage.

Inheritances received late in the relationship or after separation are more likely to be treated as a significant contribution by the beneficiary, although the non-beneficiary partner’s contributions and overall financial needs will still be taken into account.

Even if an inheritance is kept separate (for example, in a separate bank account), the Court may still consider it when assessing each party’s contributions and future needs.

Expected inheritances are generally not considered unless the person who made the will cannot change it anymore, for example, due to lack of capacity. Even then, the Court will only consider it if it is relevant and fair to do so.

Some key takeaways from previous Court decisions are:

  1. An inheritance is not automatically protected. In Bonnici & Bonnici, the Court said inherited property does not fall into a special protected category just because it is inherited.
  2. Long marriages can reduce the impact of an inheritance. In Elgin & Elgin, a $1.3 million inheritance received 10 years prior was not given special treatment after a 40 year marriage.
  3. The size and use of the inheritance matters. In Roverati & Roverati, one party inherited much more than the other and used it on the household; the settlement was adjusted in their favour to recognise that contribution.
  4. Inheritances received late in the relationship can still be included. In Miller & Miller, the inheritance formed a large part of the asset pool and was taken into account when considering the receiver’s contributions.
  5. The Court in Sinclair & Sinclair reminded parties that inheritances should not overshadow the broader picture, particularly where both partners have contributed equally over many years, whether financially or through care and support within the family
  6. Future inheritances might be considered. In Moritzen & Moritzen, a future inheritance from an elderly parent was relevant enough to adjust the division for future needs.

One theme is clear: context is everything. Different cases have had different outcomes when their underlying circumstances are different.

So, what should you do?

If you have received or expect to receive an inheritance, the best thing you can do is get specialised family law advice to understand the potential impact on your property settlement.

At Hazel Family Law and Mediation, we understand that inheritances often carry emotional weight. We are here to support you with practical, compassionate advice tailored to your circumstances. We offer a free 30-minute initial appointment to help you understand your options and the next steps forward.