Can Future Inheritance Be Included in Divorce Settlements in Australia?

When navigating the complexities of divorce, one of the most challenging aspects is the division of assets and property. A common concern that arises during these discussions is whether future inheritance can be included in divorce settlements in Australia. Understanding how the law views future inheritance is essential for those going through a separation. We share more with a focus on Queensland law in the article below.

 

Understanding Property Settlements in Queensland

In Queensland, the Family Law Act 1975 governs how property is divided after a divorce. The process of property settlement considers both parties' contributions to the marriage, including financial contributions (like income and investments) and non-financial contributions (like homemaking and child-rearing). The goal is to achieve a "just and equitable" division of property, which may not always mean an equal split.

 

Understanding Future Inheritance in the Context of Divorce

Future inheritance refers to assets or property that one might inherit from a family member or other individuals after their death. Unlike current assets, future inheritance has not yet been received, leading to questions about whether it can be considered part of the asset pool in a divorce settlement.

As mentioned above, the Act focuses on achieving a "just and equitable" outcome when dividing assets, but it does not specifically include provisions for future inheritance. This is because future inheritance is considered an expectation rather than a guaranteed asset, and there is always the uncertainty of whether it will materialise or what its value might be.

 

When Future Inheritance Might Be Considered

Although future inheritance is not typically included in the divisible property pool during a divorce, certain circumstances might lead the court to consider it indirectly:

  1. Imminent and Substantial Inheritance: If it can be demonstrated that a future inheritance is both significant and likely to occur in the near future, the court might take this into account when making decisions about property settlement. However, this situation is uncommon and usually depends on the specific details of the case.
  2. Financial Resources and Future Needs: The court may consider the prospect of future inheritance when assessing the financial resources and future needs of both parties. For instance, if one party is expected to receive a substantial inheritance, this may influence the court's decision regarding their need for a larger share of the existing assets or ongoing financial support.
  3. Impact on Spousal Maintenance: Future inheritance can also be relevant in the context of spousal maintenance. If one spouse is likely to receive a large inheritance, it could reduce their need for ongoing financial support from the other party.

 

How Queensland Courts Approach Future Inheritance

Queensland courts operate under the principles established by the Family Law Act 1975, which applies nationwide. In general, courts are cautious about including future inheritance in the asset pool because it remains speculative until it is actually received.

For example, in cases like White & Tulloch (Deceased) [2003] FamCA 458, the court acknowledged the likelihood of future inheritance but did not directly include it in the asset pool for division. Instead, it was considered when assessing the financial circumstances of the parties. This case demonstrates that while future inheritance is not automatically included, it can still play a role in the overall settlement process, particularly when determining the future needs and financial resources of both parties.

 

Protecting Future Inheritance in Divorce

If you are concerned about how your future inheritance might be treated in a divorce settlement, there are several steps you can take to protect it:

  1. Pre-Nuptial and Post-Nuptial Agreements: These agreements can specifically address how future inheritance will be handled in the event of a divorce. Having a legally binding agreement in place can provide clarity and protection, ensuring that both parties are on the same page.
  2. Family Trusts: Establishing a family trust can be an effective way to manage and protect future inheritance. However, it's important to seek legal advice, as the courts have the power to examine trusts closely to ensure they are not being used to unfairly shield assets.
  3. Open Communication and Legal Advice: Discussing potential future inheritance with your partner and seeking advice from a family lawyer can help mitigate disputes during the divorce process. A lawyer can provide guidance on the best strategies to protect your interests while ensuring that all legal obligations are met.

 

Conclusion: Future Inheritance in Divorce Settlements in Australia

In summary, while future inheritance is generally not included in the property pool for divorce settlements in Australia, it can still influence the court's decisions depending on the circumstances. The Family Law Act 1975 ensures that all relevant factors, including the potential for future inheritance, are considered to achieve a fair and equitable outcome.

If you have concerns about how your future inheritance might be treated during a divorce, it’s important to seek legal advice tailored to your situation. At Pullos Lawyers, we specialise in family law, including property settlements, spousal maintenance, and estate planning. Contact us today for expert guidance and support. For more information, explore our other services and insightful blog posts.