Can my spouse claim against my family’s money?
As the old adage goes when you marry someone, you are also marrying their family. However, this does not necessarily mean that if you go on to divorce that you are entitled to claim against their family’s money.
Throughout history, many families have provided a helping hand to young couples starting a new life together. In some circumstances this financial contribution may fall into the “marital pot” available for division upon divorce. But different types of family support are treated differently.
- A financial gift from your parents to help buy a property
The bank of mum and dad is one of the biggest lenders and sources of deposits for first time buyers. If your parents have gifted you with funds to help buy the home that you and your spouse will live in, then this gift will fall into the marital pot.
- A loan from your parents to help fund your deposit
However, if your parents have given you a loan (not a gift) to help you start out, this loan will need to be respected and repaid. It will not fall into the marital pot. Avoid any evidential issues around proving the loan by:
- Being transparent from the start with your partner that this is a loan, not a gift;
- Having a proper loan agreement drawn up with your family.
- Buying property with your family
Remember, your spouse is divorcing you and not your family. Therefore, they can only make a claim against your share of jointly owned property. They cannot make a claim over someone else’s share (i.e. another family member’s).
- Future inheritance
The law protects future inheritance, and your spouse cannot claim against this. Any family wealth which is not in your hands does not fall into the marital pot. However, if there is an imminently expected inheritance then the court will take this into account as one of the circumstances of the case and consider whether this inheritance can be relied upon to help meet your needs.
- Received inheritance
If you have received an inheritance and have used this money to, for example, form the deposit of your family home, this money will be considered as having been “mingled” with the marital assets. It will therefore fall into the marital pot. If however you have kept your inheritance separate and it has not been used for the benefit of you and your spouse it will not be considered to be intermingled and will fall outside of the marital pot. An inheritance will still be considered by the court as part of the resources of one party.
- Family trusts
If you benefit from a trust interest it may be considered a resource to which the court will have regard and if you have consistently received distributions from the trust it is likely the court will conclude those will continue.
Where a trust is considered to be a “Nuptial settlement” the court has the power to vary the trust to provide a distribution for your spouse. A trust will be considered to be nuptial in nature where it has been set up in connection with a marriage or has otherwise been used to benefit you and your spouse during the marriage.
If you are getting married and have family wealth you wish to protect, it is worth considering whether a pre-nuptial agreement would be suitable. A pre-nuptial agreement can deal from the outset of a marriage with which assets will form part of the marital pot, and which will fall outside it. If you are getting divorced and there are family assets in question, it is always worth getting legal advice tailored to your particular situation.
If you would like to learn more about the topics discussed in this blog, please contact any of our expert family and divorce lawyers on T: 020 7420 5000 or E: hello@flip.co.uk.