I have recently separated from my spouse and have now received a significant inheritance. Will this be subject to any family law proceedings?

Recently, a number of decisions have been handed down dealing with ‘post separation contributions’ and how they are considered under the Family Law Act (1975) Cth.

‘Post separation contributions’ can be considered as assets received by a party following separation and could include compensation payments, property received (for example by a gift) and inheritances.

Of these recent decisions, none is more pertinent than the case of Calvin & McTier [2017] FamCAFC 125.

This matter involved a husband and wife who separated after an eight year relationship. They had one child together who spent equal time with both parents post  separation.

Four years after separation, the husband received a significant inheritance following his father’s death.

The wife then issued court proceedings, neither party having done so before that time, to determine all outstanding financial matters between them. The pool of assets that the wife requested to be divided included the inheritance received by the husband post separation (albeit only the balance remaining, at that time being $430,686.00).

The Trial Magistrate made Orders, one of which added the inheritance into the asset pool to be divided. The Trial Magistrate then divided the total asset pool 75% to the husband and 25% to the wife. This was further reduced to 65% to the husband and 35% to the wife based on other factors.

The husband appealed the decision of the Trial Magistrate specifically questioning whether the Trial Magistrate erred in adding the inheritance into the pool of assets available for division. The husband argued that the inheritance should not have been included in the pool of assets as it was ‘totally unconnected with the parties’ marriage or with any circumstances arising from the parties’ matrimonial relationship.’

The Full Court found that all property held by either of the parties at the time of the hearing before the Court, including the inheritance, could be included in the pool of assets available for division regardless of when it was acquired by either party. This is entirely at the discretion of the Trial Magistrate.

The Full Court then considered whether the Trial Magistrate erred in exercising his discretion to include the inheritance in the pool of assets available for division or whether it should be dealt with separately. The Full Court found that the Trial Magistrate did not err and the appeal was dismissed. To make matters worse, the husband was also ordered to pay the wife’s cost of the appeal.

In light of this case, it is imperative that if you have separated from your spouse, that you seek legal advice as soon as possible. Assets from any source can be seen as contributions made by either party post separation and are likely to be added into the asset pool available for division.

It is strongly advised that couples who are separating reach an agreement and document this in a binding form, or, if there is no agreement, make an application to the Court for property settlement in a timely manner. When there is a passage of time after separation, there are likely to be significant post separation contributions to be brought into account, as well as the assets accumulated during the relationship.

Should you wish to speak to a lawyer further about finalising your assets following a separation, please get in contact with a member of our family law team.

This article was written by Solicitor, Callen Bubner

Practice Area: Family Law

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