Inheritance due ... Getting divorced

Hoploz

A relative has a large inheritance on its way, due to be paid out in the next few weeks. She is getting divorced and doesn't want her husband to claim half of it (understandable)

She plans to put it in to a separate bank account in her daughter's name, which will be locked away until she is 18 but could still be accessed in the mean time if she needs it to put towards a house or something.

Is this going to work? Or would it be considered some sort of deprivation of assets?

BobQ

http://www.divorce.co.uk/your-finances/hidden-assets-on-divorce

If the divorce proceedings have not yet been started your relative is on dodgy ground if they get caught.

ETA At best this could mean a less favourable settlement that takes into account the dishonesty, at worst it could include prosecution for contempt of court

FBaby

If that was possible, wouldn't everyone do it to avoid paying out whoever they don't want to but legally have to!

Hoploz

I thought it was too simplistic. The alternative is to put it in trust but tbh that's where the money is finally being released from, 10 years after the death! Long story. So she wants to keep it simpler without more solicitors to pay year after year etc.

If she started proceedings before receiving the money would that make any difference then?

elsien

It can do, but it probably depends on the circumstances. A relatives ex-wife's inheritance - not huge, about 10K if I remember rightly- was judged in court to not be a marital asset.
Your friend should consider legal advice - maybe one of the free half hour sessions as a starting point?

BobQ

If the money is in trust it is not the beneficiaries. Once the trustees hand it over to the beneficiary she cannot give it away to a trust or an individual as a way of avoiding its inclusion in the divorce assessment. Or more strictly if she does and the spouse is aware of its existence, the court has the power to order the money is returned to its jurisdiction.

You need to understand that there is a difference between an inheritance being declared and it being divided in the settlement.

At some point in a divorce a statement of affairs is produced by each party and if it goes to court they must certify it is accurate. But it is possible that depending on the amount, when it was inherited, how it has been used, that a court would disregard the sum when dividing the marital assets.

The point to understand is that there is no right to have money inherited while married disregarded in the settlement. In fact there is no right to have expected inheritances disregarded. But in many cases the inheritor will be allowed to keep the inheritance assuming it has not been put into joint names or used to buy a joint asset.

See http://www.bbc-law.co.uk/legal-news/inheritance-and-divorce/

Hoploz

That's useful, thanks BobQ.

She isn't 'hiding' it exactly - her husband is aware the inheritance is due. She just wants to protect it as it's going to be about £60k and if half were given to him it would be a lot to lose (after waiting so long to get it as well) It could make a big difference to her and ther children's lives from here on.

Sambella

It is all about reaching a fair settlement. If she hides money from the authorities then the resultant award is not fair

She may not have to give her husband half.

Would she be so agreeable if it was hubby hiding the cash???

Hoploz

Unlikely. Hubby is a gambler and has taken everything they've worked for so far already.

Sambella

That's unfortunate and sad but that points to there being a danger of hubby letting the cat out of the bag when it comes to divorce proceedings especially if things become bitter as he knows about it. I would worry about her getting in trouble for non disclosure.

She doesn't need that on top of everything else.

[Deleted User]

Can't believe the advice here, if it was role reversal there would be different advice given I bet.

It should be disclosed during the divorce surely?